Cons and Pros of LLC and PJSC

Posted on Posted in Business Guidelines

Cons and Pros of LLC and PJSC

Type of business entity

Pros

Cons

Limited Liability Company (LLC)

  • Easy to incorporate and operate
  • Minimum number of shareholders
  • Minimum number of board of directors or managers
  • Optional appointment of Chief Financial Officer
  • Optional Publications of shareholders’ invitation in news papers
  • Lower Governmental fees
  • Optional assignment of an inspector
  • Unlimited period of managers assignment
  • Dividing the interests by agreement
  • Providing all the required capital
  • The company could not be transformed into another form of company; thus the company should be dissolved and a new PJSC should be established
  • The transfer of shares is subject to the mandatory approval of a majority of shareholders holding three quarter of shares provided for by the law
Private Joint Stock Company (PJSC)

  • Providing just 35% of the required capital in cash
  • The Article of Association may determine whether the transfer of shares may be freely effected, or subject to a right of approval.
  • Higher Minimum number of shareholders
  • Higher Minimum number of board of directors or managers
  • Mandatory appointment of Chief Financial Officer
  • Mandatory Publications of shareholders’ invitation in news papers
  • Higher Governmental fees
  • Mandatory assignment of an inspector
  • Limited period of managers assignment
  • Dividing the interests according to portion of the shares unless in case of preferred shares

Foreign share-holders can also purchase up to 49% stocks of existing public joint stock companies. However, such cap varies if stocks of public joint stock company are being traded in security and exchange market of Iran.

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