Dr. AbdelGadir Warsama Ghalib
(From my book: Banking & corporate business laws)
LIMITED LIABILITY COMPANY (LLC)
A limited liability company (LLC), legally speaking, can be managed by one or more manager(s) to be chosen from the partners of the company themselves, or alternatively, from outsiders provided the number of the management board, at all times, shall not exceed five members.
It is the primary duty of the managers of the company to prepare the balance sheet, the activities of the company and the clear proposals concerning the distribution of profits. While exercising such duties, the managers should make sure that such responsibilities are achieved and performed within three months from the end of the financial year.
Moreover, the managers should obtain the required ratification required for the balance sheet and within ten days to lodge the same with the Ministry and other competent government authorities, if any.
In case, there is more than one manager, the memorandum of association of the company may provide for the formation of a “board of management”, the method of operation of the board, and the required majority for adopting the necessary resolutions… All these issues shall be elaborated in the memorandum to regularize and legalize the actions taken by the “board of managers”.
If the number of partners in any LLC exceeds seven; the company can have a supervisory board formed of at least three partners. The method of appointing the supervisory board can be according to the memorandum of association (M o A). However, the appointment shall be for specific period. Members of the supervisory board can be partners in the company whereas it is not necessarily the same in relation to the management board.
The general assembly of other partners in the company may appoint the supervisory board after the expiry of their period for an extra time. After the expiry of the period, the general assembly of the company can appoint new members to the supervisory board from among the partners.
The general assembly can exercise its authority to hire and fire the supervisory board at any time, but on acceptable justification and reasoning.
Partners, who are at the same time members of the board, cannot have the right to vote for the election or dismissal of the supervisory board. The board supervises the budget of the company, preparation of the annual report, distribution of profit and submits its report in this regard to the general assembly at least fifteen days prior to their meeting.
The primary duty of the management board is the running of the daily activities of the company. In this respect, the supervisory board cannot be liable for the actions of the manager unless they became aware of the faults and fails to mention these in their report submitted to the general assembly.
The assembly composed of all partners, shall be convened at the invitation of the managers at least once every year during the four months subsequent to the end of the financial year at the date and place specified in the memorandum of the company.
Managers must call the assembly to convene if so requested by the supervisory board, or by one or group of partners holding not less than a quarter of the capital of the company. Invitation to attend the meeting have to be made by registered post with an acknowledgement of receipt addressed to each partner at least twenty one days before the due date. The invitation must include the particulars of the agenda and the place and time of the meeting.
Every partner irrespective of the number of shares he owns is entitled to attend. Each partner shall have a number of votes equal to the number of shares he owns or represents.
In case a partner is unable to attend the meeting, he could delegate another to represent him by proxy. Partners who are managers in the company are not eligible to represent others at such meetings.
Such details, explain in details, the necessary legal steps that are required for the appropriate management of LCCs. All partners in such companies are to be aware and observe such legal mechanism..