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Joint Stock Companies

 

General Points

  • Russian law describes public and non-public joint stock companies;
  • Public companies are entitled to have their stock publicly traded, but they must comply with rather strict legislative requirements concerning the structure of their governing bodies, relationships between shareholders, and obligatory reporting. None of the above are as strict as  requrenments of more developed jursidictions; 
  • Non-public JSCs, on the other hand, cannot arrange for public trade of their stock, but may enjoy more flexible regulation with respect to their corporate structure and operations. Shareholders of a JSC are not generally liable for its debts and their risk is limited to their investment;
  • Shareholders may sign shareholders’ agreements that regulate how their rights are exercised;
  • Russian law stipulates that joint stock companies may issue stock, which is deemed as securities and subject to registration.

Formalities

JSC’s charter must specify:

  • Whether the JSC is public or non-public;
  • The amount of the initial capital;
  • The number, nominal value, and classes of shares;
  • The composition and powers of the governing bodies of the JSC;
  • The procedures for shareholders meetings;
  • Whether a government entity has any special voting right;
  • Both public and non-public JSCs must maintain a shareholders’ register in which the holdings of the shareholders are noted. This function must be performed by a licensed registrar.

 

 Other Requirements:

 

  • Initial capital. A joint stock company’s capital is divided into a set number of shares. The capital of a public JSC must be at least 1,000 times the statutory monthly minimum wage around USD $1500 USD. A non-public joint stock company must have a minimum charter capital of aournd USD $150 USD;
  • Governance. A joint stock company’s higher management body is the general meeting of shareholders, which must convene at least once a year. A public joint stock company must have a board of directors consisting of at least five members. The company’s executive body may be collegiate (board, directorate) and/or “one-person” (director, general director). It is also possible to have several “one-person” executive bodies in a joint stock company that may represent the company jointly or separately. A joint stock company’s executive body carries out the day-to-day management of operations and reports to the board of directors and the general meeting of shareholders. We can find nominee directors to meet these formalites if necessary;
  • Auditors. In addition to the aforementioned governing bodies, a JSC must have an auditor. The auditing function can be performed by an Internal Auditing Commission or an Internal Auditor. The auditor must be elected by the shareholders. Our services include finding appropriate auditors for client’s needs.
Reeves/Duhovnikoff & Associates Ltd. 2017

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