FORMS OF COMPANIES IN MONGOLIAN LAW

FORMS OF COMPANIES IN MONGOLIAN LAW

   The Company Law divides companies into three types: limited liability companies (LLCs), public limited companies (PLCs), and private limited companies (LTDs). 
1. A limited liability company (LLC) is a company in which the investment of the shareholders is divided into shares and the power to dispose of them is regulated by statute or the company's charter.
2. Public limited company (PLC) is one in which the investment of the shareholder is divided into shares that are publicly available and listed on a stock exchange.
3. private limited company (LTD) is one in which the investment of a shareholder is divided into shares, the shares are registered with a securities depository, and the shares are traded on a closed market outside of a bond exchange association.
   Each company has a shareholder, and the shareholders' information of the LLC is registered with the state registry authority, while the shareholders of the private and public limited companies are registered in the securities deposit account of the Central Securities Depository LLC.
   When you sell your shares to a limited liability company, you must enter into a written sale and purchase agreement, amend the company's charter, and file it with the state registry to protect your ownership rights. In the case of an PLC, you can guarantee your rights to the CSDs by placing a purchase order with a brokerage firm. In order to sell its shares in LTD, the CSD submits ownership records to the FRC by submitting the documentation required by the "Regulations on Closed JSC."
   Finally, the global trend is to switch from a limited liability company to a Public limited company, which involves raising long-term, unpaid long-term funding from the public through an IPO. Theoretically, transforming to an public limited company strengthens corporate governance.
 
Source: Law on Company of Mongolia, 2011
http://www.frc.mn/resource/frc/Document/2020/03/31/stuapo53e94le77q/14.pdf