Comparing LLC And Corporations
A joint stock company may have a board of directors comprising at least 2 members in NJ incorporation. In case there are at least 50 shareholders in the company, it shall have a board of directors. The board of directors takes care of the general management of the company except for the matters referred to the exclusive authority of the general shareholders' meeting. If a board of directors is not formed, its functions are performed by the general shareholders meeting.
The board of directors shall be elected by the annual general shareholders meeting in the order provided by the law and the articles of association for a term of one year. The board of directors is headed by a chairman to be elected either by the general shareholders meeting or the board itself.
General Manager and Directors
The only mandatory executive body of the company is the general manager who takes care of routine management of the company. In addition to the general manager also a collegial body of directors (a directorate) may be formed. In that case, the directorate is headed by the general manager. Nomination and dismissal of the executive bodies and their members shall be made by the general shareholders meeting or the board of directors. A director may be dismissed at any time without a notice period.
Transfer of Shares
Shares belonging to a shareholder may be freely transferred (sold, donated, exchanged, invested into share capital of third companies, etc.). However, in case of contemplated transfer of shares by sale or exchange to a person who is not a shareholder of the company, all shareholders of a closed joint stock company have the right of first refusal with respect to such shares at the price agreed between the seller and the contemplated buyer. The right of first refusal does not, therefore, exist in case of donation, inheritance etc. transfer free of charge, nor does it exist in an open joint stock company. Comparison between a limited liability company and a joint stock company In comparison a limited liability company is less bureaucratically but the joint stock company is a more stable form of co-operation of at least two shareholders and its decisive advantage over the limited liability company when there are more than one shareholder may be that a shareholder is not entitled to require a part of the assets of the company to be paid back if he withdraws from the company. This in turn secures the interests of the other shareholders. This article contains general information on the subject matter and shall not be relied upon for a specific case. Specialist advice should be sought with respect to any specific circumstances.
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