Civil Code of the Russian Federation Article 97. Public joint stock company
ConsultantPlus: note.
If, as of 07/01/2015, the charter and name of a JSC created before 09/01/2014 indicate that it is a PJSC in the absence of signs of publicity, such a JSC must register a share prospectus before 07/01/2020 or change the charter, excluding public status from the name (Federal Law dated 06/29/2015 N 210-FZ).
ConsultantPlus: note.
JSCs created before September 1, 2014 and meeting the criteria of a PJSC are recognized as such, regardless of whether this is indicated in their name. For exceptions to this rule and refusal of public status, see Federal Law No. 99-FZ dated May 5, 2014.
1. A public joint-stock company (clause 1 of Article 66.3) is obliged to submit information about the company name of the company, containing an indication that such a company is public, for inclusion in the unified state register of legal entities.
A joint stock company has the right to submit information about the company's corporate name, containing an indication that such a company is public, for inclusion in the unified state register of legal entities.
A joint stock company acquires the right to publicly place (by open subscription) shares and securities convertible into its shares, which can be publicly traded on the terms established by securities laws, from the date of entry into the unified state register of legal entities of information about the company's corporate name containing an indication that such a society is public.
2. The acquisition by a non-public joint-stock company of the status of a public company (clause 1 of this article) entails the invalidity of the provisions of the charter and internal documents of the company that contradict the rules on a public joint-stock company established by this Code, the law on joint-stock companies and laws on securities.
3. In a public joint-stock company, a collegial management body of the company is formed (clause 4 of Article 65.3), the number of members of which cannot be less than five. The procedure for the formation and competence of the said collegial management body are determined by the law on joint stock companies and the charter of the public joint stock company.
4. Responsibilities for maintaining the register of shareholders of a public joint-stock company and performing the functions of the counting commission are carried out by an organization that has a license provided for by law.
(see text in the previous edition)
5. In a public joint stock company, the number of shares owned by one shareholder, their total par value, as well as the maximum number of votes granted to one shareholder cannot be limited. The charter of a public joint stock company cannot provide for the need to obtain anyone's consent to alienate shares of this company. No one can be granted the right of pre-emption to acquire shares of a public joint-stock company, except in cases provided for
More and more new organizations are appearing in the modern economic market. They have different forms of ownership, engage in unique types of activities and are subject to certain taxation regimes.
Types of organizations
There are many legal and individuals who are involved in maintaining economic activity on Russian territory. These are individual entrepreneurs, LLCs, OJSCs, CJSCs and many others. All these enterprises are different from each other, but there are also similarities. According to certain criteria, the type of organization is selected, which continues to operate throughout the entire stage of the company’s activities. But in this article we will talk specifically about OJSC. This is a certain type of organization with its own regulations, rules and reporting.
Forms of enterprise ownership
As mentioned earlier, organizations are different types: OJSC, CJSC, LLC, individual entrepreneurs, partnerships, private entrepreneurs and many others. These are all called forms of ownership. But due to the fact that this article discusses JSC specifically, let’s talk about it.
OJSC is the most strictly regulated form of ownership. There are a lot of requirements for such organizations, but they also have their advantages. They consist in the fact that the company can produce its own shares and sell them. And here it doesn’t matter to whom anymore. This can be either one of the founders of the company or any other investor who wants to become a shareholder. Shares are purchased at the highest price (whoever pays the most becomes their owner). In this way, it is possible to increase the investment of participants in the company's activities.
However, there are also some disadvantages. Unlike all of the above forms, society participants are fully responsible to the organization. This means that if the company makes a profit, it can be distributed among the shareholders, but if a loss occurs, then all participants bear losses, that is, they must pay all debts.
I would also like to note that the number of shareholders in an OJSC is not limited.
What is OJSC
So, let's figure out what an open joint stock company is. An OJSC is an organization created by several participants (shareholders) who have invested their cash in the form of shares in authorized capital companies.
As in any new organization, first you need an initial investment in the enterprise. To do this, several people (it does not matter whether it is a legal entity or an individual) unite into one group and begin registering an enterprise. Due to the fact that the authorized capital consists of shares of each participant, the form of ownership will be a joint stock company.
Next, you need to find out what kind of enterprise the enterprise will be: open or closed. The difference is that in a CJSC the shareholders are exclusively the founders of the company, while in an OJSC the shareholders can be any individuals or legal entities, regardless of whether they are founders or not.
What are JSC shares
As mentioned earlier, the authorized capital of an OJSC consists of shares of the company’s founders. However, not all people understand the meaning of the word “share”. So, a share is an issue-grade security that is provided to a person or company in exchange for a sum of money contributed to the initial capital of a new organization.
There are two types of shares: ordinary and preferred. The difference between them is that the owner of the preferred share has a guarantee stable income from the company’s activities and the initial receipt of dividends upon their distribution. However, regardless of the type of share, a participant in an OJSC has the right to vote at the general meeting. One share equals one vote.
The founders of the company thus create a block of shares that shows the importance of who owns it.
Activities
Regardless of the form of ownership of the organization, the enterprise can engage in any type of activity. That is, there is no difference in how exactly the company is registered; it does not affect further development. Only the taxation regime depends on the type of work selected. And an OJSC is an organization that can be in any regime; the legislation of the Russian Federation does not impose restrictions on this matter.
Accounting in JSC
JSCs are commercial organizations. It follows from this that all accounting in such companies is carried out according to overall plan accounts and rules. The only thing you should pay attention to is the Law “On Joint Stock Companies”. It describes in detail the conduct of activities and accounting in the JSC.
So, in order for the company to start operating, it is necessary to draw up the company’s accounting policies and a working chart of accounts. Next, the initial capital of the company is entered into the balance sheet. Then the work itself begins. All expenses and income are accounted for in certain accounts, as described in the PBU. At the end of the year, all income is transferred to account 99, and then to 84. That is, there are no differences in accounting.
A double entry is made: one amount is indicated in the debit of one account and the credit of another. Balance sheets, etc. are compiled. At the end of the year, financial statements are prepared, consisting of 5 forms.
General Meeting of Shareholders
At the beginning of the new calendar year, a meeting of all founders of the company is held. This is called the annual meeting of shareholders. After the end of the financial year, all members of society gather in the company to clarify problems in the organization. At one table, all people review the company’s statements, sign them, identify inaccuracies, pros and cons of the past year. Also at this meeting a decision is made on the distribution of profits. However, in order for the meetings to take place, before the end of the calendar year, a list of issues that must be considered by shareholders is compiled and all participants are notified about them. Afterwards the consent or refusal of the founders must be received. If someone refuses, the meeting may be rescheduled to another date. This is the only way to gather all shareholders.
However, participants can meet more often. This is called an unscheduled meeting. At such events, issues that cannot be left for later are addressed. An unscheduled meeting must be convened either by the director of the company or certain of its founders who are involved in the conduct of activities.
Enterprise reporting
And finally, it is necessary to say about the reporting of the JSC. It is strictly regulated by law. Large fines are imposed for violations; the main thing here is not to make a mistake. But first things first.
The reporting of an enterprise begins with the closure of the company's accounts. This is done according to the rules of record keeping. Next, the reporting itself is generated, which is mandatory for all organizations. However, the OJSC prepares complete reports, without abbreviations or omissions. A distinctive feature of JSC reporting is that it is submitted quarterly. But it is necessary to compile it once every three months only for shareholders, so that they can track the receipt of profit and expenses of the enterprise. For the tax service, reporting is submitted once a year. But that's not all.
JSCs are required to conduct the next audit at the end of the year. To do this, an agreement is drawn up with a third-party organization to verify the correctness of record keeping and tracking errors, if any. Only after this the reporting is considered complete.
But even in this form it cannot be handed over. It is necessary to convene an annual meeting of shareholders and submit reports to JSC named after. Society members must sign it. Only after this can reports be submitted to the tax authority at the place of registration.
And a few words about the publication of reports. JSCs are required to publish it on their website. Otherwise, a fine will be imposed on the organization. Five reporting forms must be posted on the Internet along with the auditor's report.
Public Joint Stock Company: An Overview of the Term
Briefly: Public joint stock company is one of the key concepts of the new classification of business companies. It is distinguished by openness and transparency of investment processes, an unlimited number of shareholders, and more stringent regulations on corporate procedures. It is this form of ownership that most of the largest organizations in the Russian Federation choose.
The concept of “public joint-stock company (PJSC)” is relatively new in the civil legislation of Russia (introduced on September 1, 2014). It denotes a form of organization of a public company whose shareholders have the right to alienate their shares. Its main differences are
The definition of “public” suggests that this type of JSC must adhere to a policy of more full disclosure information compared to non-public information. This helps to increase the transparency and attractiveness of investment processes (shares are placed and circulated among a wide range of people).
The structure of PJSC can be represented as follows (see Fig. 1)
Fig.1. Structure using the example of PJSC United Aircraft Corporation
To understand the features of the creation and activities of a PJSC, let’s compare it with other types of joint stock companies and consider examples of existing organizations with this form of ownership.
Public or open?
Since in regulations There are several concepts that are close to each other in meaning; even among corporate law specialists, debates about their legal interpretation continue. Many questions concern the differences between “new” PJSC and “old” OJSC. At first glance, “only the name has changed,” but this is not so (see Table 1)
- Disclosure of information about activities was mandatory
- It was necessary to include information about the sole shareholder in the charter and publish them
- They can apply to the Central Bank for exemption from disclosure
- It is enough to enter information into the Unified State Register of Legal Entities
Advantage for purchasing shares and securities
It was possible to reflect in the charter the advantage of purchasing free shares by existing shareholders and security holders
Maintaining a register, having a counting commission
It was allowed to maintain the register of shareholders on their own
The register is maintained by third-party organizations that have a license for this type of activity; the registrar is independent
A board of directors was required if the number of shareholders exceeded 50 people
It is mandatory to form a collegial body of at least 5 members
Thus, although the changes related to public joint stock companies do not seem fundamental, ignorance of them can significantly complicate the life of entrepreneurs who have chosen this form of corporatization.
Public or non-public?
From the point of view of a non-specialist, a public joint-stock company in its own words is a former OJSC, and a non-public company is a former CJSC, but this is an overly simplified vision. Let's consider what rules apply in the new classification of business entities to organizations of different legal status:
- Characteristic property PJSC is open list prospective buyers of shares, while a non-public joint stock company (NAO) does not have the right to sell its shares through public auction
- The law requires PJSCs to have a clear gradation of issues falling within the competence of members of the board of directors and intended for discussion at the general meeting. NAOs are more free: they can change the collegial governing body to a sole one and carry out other reforms in the activities of governing bodies
- Decisions made general meeting and the status of participants in the PJSC need to be confirmed by a representative of the registrar company. The NAO may contact a notary on this issue
- A non-public joint stock company has the right to include in its charter or corporate agreement a clause stating that, in relation to other interested parties, priority in purchasing shares remains with existing shareholders. While for PJSC this is unacceptable
- All corporate agreements concluded in a PJSC must undergo a disclosure procedure. For the NAO, it is sufficient to notify that the contract has been concluded, and its contents can be declared confidential
- All procedures for the repurchase and circulation of securities, which are provided for by Chapter 9 of Law No. 208-FZ, do not apply to organizations that have officially recorded the status of non-public in their charters.
How to re-register an OJSC into a PJSC?
The renaming procedure is carried out by replacing words in the name of the organization. Next, the charter should be revised, especially as it relates to the board of directors and the rights to benefits when purchasing shares, and brought into compliance with the provisions of the legislation on public joint-stock companies.
The Civil Code states that the rules on public companies are applicable only to joint-stock companies whose charter and corporate name directly indicate that they are public. These rules do not apply to other legal entities.
The most famous PJSCs in Russia
The largest representatives of this form of ownership regularly top the rankings of the richest organizations in the country and the world. Here are several legal entities included in the TOP-10 RBC rating for 2015:
Gazprom is the leader in terms of revenue and capitalization rates in Russia (see Fig. 2)
Fig.2. Financial indicators Gazprom
Fig.3. Financial indicators of Rosneft
Fig.4 Financial indicators of Sberbank of Russia
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What is the difference between a PJSC and an OJSC
Among the variety of existing organizational and legal forms of legal entities, the name “Open Joint Stock Company” differed from others in that it was the most understandable. “Joint stock company” means that the participants of this association are holders of shares of this enterprise, which they bought or otherwise acquired ownership of. “Open” as opposed to “closed” means that these shares can be publicly traded, i.e. be sold on exchanges or assigned to any person who wishes to buy them.
The law came into force on September 1, 2014 Russian Federation No. 99-ФЗ dated 05/05/14, which introduced changes to the Civil Code, in particular to the names and content of certain legal forms of ownership.
The name PJSC - Public Joint Stock Company - was assigned by the above-mentioned law to the same OJSC. The legislator simply excluded the concept of “open” (OJSC) and “closed” (CJSC) joint stock company. This means that a PJSC differs from an OJSC in that it is, in fact, a new name for the same association of shareholders. JSCs will exist for a short time until changes are made to their charter. Next they must decide and become “public”. The law introduces the concept of “public” and “non-public”. “Public” implies the same free circulation of shares and bonds of a given company. The new organizational and legal form, after all, differs slightly from that of an OJSC. The legislator puts forward certain Additional requirements to PJSC. So what is the difference between a PJSC and an OJSC?
The new law adopted amendments that increased the requirements for the regulation of certain aspects of the activities of PJSCs, in contrast to OJSCs.
In addition to the fact that the characteristics of a PJSC are the open placement of shares and bonds and their admission to exchange trading, the company must also justify the name “public”. What does it mean? PJSCs will pursue a more open information policy: hold shareholder meetings more often, allow inspections, i.e. make “public” decisions. Before the adoption of the new law, a legal entity with the organizational and legal form of an OJSC was required to hire a lawyer or legal organization to support its activities. Now it will be necessary to use the services of special registrars to maintain a register of shares; decisions of shareholder meetings will have to be certified by a notary or registrar. The requirements for auditing are also increasing.
At the moment, in the economy there are many organizational forms for carrying out entrepreneurial activities. Very often there are two abbreviations OJSC and PJSC. Many people believe that these are the same thing. However, there are some differences that help to understand how a PJSC differs from an OJSC. Let's try to understand these definitions.
An open joint stock company is an organizational form that generates capital by issuing shares. It is a security that allows you to determine the contribution of each participant in the creation of the company, as well as the share of the profit received. It's called dividend. Shares are issued for free sale on the securities market. They, in turn, also determine income and losses. What else are shares needed for?
Shareholders can freely dispose of these shares, for example, donate, sell, etc. Shares can be sold to third parties. All information about the activities of such enterprises should be known to a wide circle of the population. OJSC differs in that before registering the company, you do not have to contribute the entire authorized capital.
The founding capital cannot be less than a thousand minimum wages; the number of shareholders is not limited to a certain figure.
An OJSC may carry out activities not prohibited by law in various fields. Typically, a shareholders meeting is held once a year. To manage its activities, the company hires a director or several directors. They create a so-called collegial body.
The concept of a closed joint stock company
A closed joint stock company is one of the most common forms of business. Typically, this form is chosen when the participants are related by family ties.
The founding capital of such organizations should not be less than one hundred minimum wages, and the number of participants should not be more than 50. The state is not required to exercise unnecessary control over the activities of such a company. CJSC has its own characteristics:
- shares belong to the founders;
- no one has the right to transfer shares to third parties;
- CJSCs may not publish annual reports;
- All activities are carried out in a mode closed to the public.
What is the difference between a PJSC and an OJSC?
Having examined the two most popular forms of entrepreneurial activity, we can directly move on to the concept of PJSC.
Since September 1, 2014, a law has been in force in Russia that has made certain changes to the Civil Code. He touched upon the content and name of organizational forms and forms of ownership. Now the name PJSC (public joint stock company) has been assigned to the OJSC. OJSCs will still exist for some time, then they are required to re-register as PJSC. ZAO therefore means Non-Public Joint Stock Company.
Despite the name change, public joint-stock companies also underwent some changes. You should not think that OJSC and PJSC are the same thing. So, what is the difference between a PJSC and an OJSC?
— one of the characteristics of a PJSC is the free placement of bonds and shares, as well as their admission to trading on stock exchanges;
— PJSCs have a more transparent policy for carrying out their activities - there is an obligation to publish lists of shareholders and reports, organize meetings of participants more often and arrange inspections. Activities become more open. This is the main point that shows how a PJSC differs from an OJSC;
- now to accompany entrepreneurial activity, no need to hire a lawyer or contact special law firms, the enterprise will use the services of registrars. They will maintain the register of shares and also certify shareholders' meetings;
— audit requirements are being strengthened.
These are the main points that determine how a PJSC differs from an OJSC. This decision and the entry into force of the law help to increase the transparency of companies’ activities and also prevent raider takeovers.
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What is a PJSC instead of an OJSC? What is the difference and why is it renamed?
In 2014, serious improvements were introduced regarding the activities of enterprises. Very often the question began to be heard in the media: “What is a PJSC instead of an OJSC?” In this article we will try to answer it, as well as consider the related innovations.
Changes since September 2014
Since September 2014, amendments to the Civil Code of the Russian Federation have been adopted. They introduced innovations in the names, as well as some adjustments to the functioning various forms property. The question most often asked in entrepreneurship is: “What is a PJSC instead of an OJSC?”
The introduction of these changes is associated with the abolition of OJSC and CJSC, namely, a change in their names, that is, the concept of closed and open joint-stock companies has been abolished.
Instead, there will now be public and non-public societies. In essence, these will be the same associations of shareholders, but some aspects of their work will still change. 
So, according to the Civil Code of the Russian Federation, the following organizations will operate on the territory of the Russian Federation:
Public.
Non-public.
Not public companies, in turn, will be divided into:
Joint-stock companies (abbreviated name AT).
Limited liability companies (short name LLC).
That is, the essence of the enterprise will remain the same, but the name will need to be changed.
The essence of the changes
Let’s try to answer the question: “What is a PJSC instead of an OJSC?”
After the renaming, the activities of joint stock companies should become more open. In essence, it turns out that public societies will have to live up to their name. 
Previously for normal functioning It was enough for an OJSC or CJSC company to place its shares and bonds on stock exchanges and make them available to everyone. This was usually done by legal departments or even hired firms.
But now the register of shares will have to be maintained by a special registrar.
Moreover, all meetings held by the enterprise should become more public. Mandatory notarization of all decisions made is also established. Certification of documents by a registrar is also allowed.
Significant changes are also noticeable in the need for annual audits. Previously, it was established only for JSCs, but now all joint-stock companies without exception are subject to mandatory annual audits.
What is an OJSC?
An open joint-stock company, or as they used to say, an open joint-stock company, is an enterprise whose fixed capital was formed through the issue of corresponding shares and bonds. Before January 1, 1995, such enterprises were called “open joint stock companies.” 
At the legislative level, the publicity of such a society was already determined, that is, all information about it should have been available to all segments of the population.
In fact, an OJSC is a company that has many owners, in other words, shareholders or owners (holders) of shares. An example is Sberbank OJSC (now Sberbank PJSC).
To manage this company, a director or even several directors were hired, who, in turn, formed a board of directors.
The OJSC, along with other enterprises, had the right to engage in all types of activities not prohibited on the territory of the Russian Federation.
Why PJSC instead of JSC?
PJSC (the decoding sounds like a public joint stock company) is a company whose shares must be publicly placed on the securities market.
In turn, this change (renaming OJSC to PJSC) imposed a number of obligations on the companies. A public joint stock company in the Unified State Register of Legal Entities must contain information that it is public.
From now on, open joint-stock companies have the right to exist, but they must amend their charter, submit minutes of the shareholders’ meeting, as well as statements in the approved form to the registration authority.
After such changes are made, the activities of the former JSC will be slightly adjusted, as they will become public.
The corresponding changes have already been made to their statutory documents such enterprises as Sberbank PJSC, Gazprom PJSC, VTB PJSC. 
The clients of these organizations have no significant reasons for concern, because in essence, these are the same enterprises, with the same activities, only they have changed their name, in accordance with the norms of the current Civil Code of the Russian Federation.
Differences between PJSC and OJSC
The main differences between a PJSC and an OJSC are defined as follows:
1. Shareholders can be both ordinary citizens and enterprises of any form of ownership.
2. The number of shareholders is not limited.
3. Shares may be transferred to third parties without the consent of other shareholders. Right of first refusal is not permitted.
4. Reporting must be published.
5. Decisions made in a PJSC must be certified by notaries or registrars.
6. Annual audit. This rule is established for all joint stock companies without exception. 
The main difference between OJSC and PJSC is their name. Existing JSCs must undergo a re-registration procedure, although no clear time frame has been established for this.
If enterprises, for one reason or another, do not make the appropriate changes to their charter, from September 1, 2014, the provisions of the current Civil Code of the Russian Federation, regulating the activities of PJSC (interpretation - public joint-stock company), apply to them. 
How to make changes?
In order to pass state registration, in accordance with the changes that have come into effect, the tax authority must provide:
1. Application in form P 13001.
2. Minutes of the general meeting of shareholders.
3. Charter in new edition in the amount of two pieces.
There is no need to pay a state fee. After the documents are submitted to the registration authority, after 5 working days it makes a decision on registration or sends a reasoned refusal. Such documents can be submitted either by the head of the enterprise or by a person with a power of attorney.
After the corresponding changes are registered, the renamed OJSC to PJSC will need to perform the following operations:
1. Change the corresponding name in all seals and stamps of the enterprise.
2. Notify all banking institutions about the change and re-register accounts.
3. Notify all your counterparties about the changes that have occurred.
4. Change your name in all publicly available sources.
Additional innovations
1. An enterprise may have two or more directors. They can work both jointly and separately, but the powers of each of them must be specified in the company’s charter. But the chief accountant is still left alone.
2. The innovation affected the contribution to the authorized capital. Now the involvement of an independent appraiser is required. This is mandatory for joint stock companies.
Answering the question: “What is a PJSC instead of an OJSC?”, we can say that this is practically the same enterprise, only renamed. OJSC is an open joint-stock company, PJSC is a public joint-stock company. The main activities carried out by the OJSC remained the same, however, significant changes were made in some areas that were mandatory.
Joint-Stock Company- this is an economic association (commercial structure), which is registered and operates according to certain rules, and its authorized capital is distributed into a certain number of shares. The main task is to generate capital for conducting certain business activities.
Joint-Stock Company(JSC), or rather its activities are regulated by the Civil Code of the Russian Federation, the Arbitration Code of Russia, the Law of the Russian Federation “On Joint-Stock Companies” and other acts and laws.
The history of the emergence of a joint stock company as a structure
It is believed that the origin of joint stock companies as a form began in the 15th century, with the formation of the Genoese Bank of St. George. It was with him that the era of such formations began. The task of the newly created institution was to service government loans. Moreover, its founders were the Maons - formations of creditors who lent money to the state, and the latter paid them back with the right to receive a portion of the profits from the treasury.
Many of the operating principles of the Genoese Bank coincided with the current characteristics of the joint-stock company:
- capital of a financial institution was divided into several main parts, which were distinguished by free circulation and alienability;
- bank management- a meeting of participants who met annually to adopt important decisions. Each proposal was put to a vote. main feature is that officials of the financial institution did not have the right to participate in the meeting. The role of the executive body was performed by the Council of Protectors, which consisted of 32 members;
- bank participants received interest payments on their shares. At the same time, the size of dividends directly depended on the level of profitability of the bank.
Since the beginning of the 16th century, new markets have been actively opening in Europe, the growth of trade volumes is accelerating, and industry is developing. Old forms of communities (guilds, maritime partnerships) could no longer protect the rights of participants in the transaction and new economic needs. This is how colonial companies appeared in Holland, England and France. In fact, the colonial states began to attract funds from outside for further development of the lands.
1602- education East India Company. Its essence is the unification existing organizations in Holland. Each company had its own shares of participation, therefore the number of representatives in the governing bodies also varied. Over time, the shares of each of the participants received the name “shares” - documents confirming the right to own part of the share. But massive speculation in stocks has forced the government to pass several strict restrictions on the misuse of capital by companies.
Almost simultaneously with the structure described above, arose English version East India Company. Its feature is an annual meeting of participants to resolve key issues by voting. Only those participants who owned more capital than the percentage specified in the charter had a vote. Leadership was entrusted to the council, which consisted of 15 members elected by the meeting.
In the 18th century After several failed attempts, John Law succeeded in creating his own bank. Subsequently, it was he who became one of the active participants in the creation of the West India Company. A few years later, other organizations in France joined it. In fact, a powerful monopoly was formed in the market, which ensured a stable flow of income to the treasury and economic growth. But this couldn't last forever. Low dividends became the impetus for the massive sale of shares of the newly formed structure. The price of securities decreased, and then completely collapsed. This caused serious damage to the country's economy.
In 1843 The first law on joint stock companies appeared in Germany. Since the beginning of the 1860s, the number of such societies has amounted to several dozen. Subsequently (in 1870, 1884) new laws concerning joint-stock companies were developed.
In 1856-1857 In England, the first legislative acts appeared that obligated newly registered communities to undergo the registration procedure, have their own charter, indicate the goals of their activities, and so on. At the same time, established companies were allowed to issue only registered shares.
In 1862 all acts and norms of England relating to joint-stock companies were collected into one law. Subsequently, it did not change, but was only supplemented with new points.
Other countries (including the United States) used already accumulated experience when creating joint-stock companies.
The essence of a joint stock company
A joint stock company is a legal entity, an organization of several market participants. The peculiarity of the structure is as follows:
- JSC participants have limited liability, which does not exceed the amount of their “infusions” into the company’s authorized capital;
A joint stock company bears full responsibility to its shareholders in terms of fulfilling obligations (including timely payment of dividends);
The entire amount of the authorized capital is equally divided by the number of issued shares of the joint-stock company. In this case, the holders are the participants of the joint-stock company, and not its founders;
The formation of the authorized capital occurs through investments of participants. In this case, the contributions made come to the full disposal of the newly created structure;
The JSC operates without a time limit, unless contrary conditions are specified in the charter of the newly created structure;
A joint stock company has the right to carry out any types of activities that are not prohibited by law. At the same time, in some areas, a JSC can operate only on the basis of an obtained license;
The newly created organization is obliged to publish an annual report, accounts of losses and income, balance sheet and other data that are provided for by law (all these issues are discussed in Article 92 of the Federal Law “On Joint-Stock Companies);
The JSC receives the right to organize representative offices, branches, subsidiaries, and so on. At the same time, you can open your own branches even outside the state.
Types of joint stock companies
Today there are two main types of such organizations:
1. Open joint-stock companies (OJSC)- these are formations in which shareholders have the right to alienate (sell) shares without the consent of other shareholders. At the same time, the JSC itself can distribute issued shares freely, without any restrictions. The total number of shareholders and founders of a JSC is not limited. If the state (municipal formation, subject of the Russian Federation) acts as the founder of the company, then such a company can only be open - an OJSC. The only exceptions are small structures that are formed on the basis of privatized companies.
TO distinctive features OJSC can be classified as:
The number of participants is unlimited;
- the amount of authorized capital - from 1000 minimum wages and above;
- shares are distributed by open subscription;
- securities can be freely sold and purchased (without prior approval);
- education undertakes to issue and publish a report, loss accounts, profitability accounts, and balance sheet every year.
2. Closed joint-stock companies (CJSC)- these are formations where issued shares can be distributed only within the formation (among the founders or a strictly defined circle of people). At the same time, open subscription for closed joint-stock companies is prohibited. In closed joint stock companies, shareholders have the right to be the first to purchase securities.
The distinctive features of the JSC include:
The number of participants should not exceed fifty people;
- the amount of the authorized capital should not be more than 100 minimum wages determined at the legislative level;
- issued shares are distributed only among the founders (options for placement among other persons are possible, but only after approval);
- current shareholders have the right to be the first to buy shares of the CJSC;
- closed society may not publish any reports at the end of each year.
Differences between a joint stock company
Modern joint-stock companies differ significantly from the following entities:
1. From business partnerships. JSC is an association of capitals of several participants, and HT is an association of capitals of participants and a group of persons who implement joint projects within the framework of one association. In addition, in HT, participants assume full responsibility for educational obligations. JSC does not provide for such liability.
2. From limited liability companies (LLC). The common features of LLCs and JSCs are the common capital of the participants, which is formed through their investments in a common cause. But a joint stock company has several characteristic features:
- the minimum amount of authorized capital for a joint-stock company is established at the legislative level (as well as the number of participants). For an LLC, this value is the “ceiling”;
- all participants of the joint-stock company receive shares that can be disposed of at their own discretion (sell or buy at stock market). In a simple community, the authorized capital is divided into contributions;
- the procedure for inclusion and exclusion from LLC (JSC) differs;
- each holder of a share of a joint-stock company has equal rights and responsibilities regarding the operation of the structure. In a simple society, each participant can have his own obligations.
- the management structure of a JSC is much more complex than that of an LLC.
3. From production cooperatives. The following features are worth highlighting here:
- participants of the cooperative are responsible for the obligations of the cooperative (that is, general liability). In a joint-stock company, each participant is responsible within the limits of his contribution;
- cooperative members may be expelled for failure to fulfill obligations or violation of norms. In a JSC, no one has the right to deprive a participant of shares under any circumstances;
- a cooperative involves the formation of a community of people and their investments, and a joint-stock company is simply an association of investments.
Creation of a joint stock company
To organize your own joint stock company you need to go through several stages:
1. Economically justify the future structure. That is, first you need to form an idea for future formation. All members of society must clearly understand the tasks assigned to them, development prospects, potential profitability, and so on. Special attention should focus on the following issues:
Is JSC best shape for the chosen area of activity. Here you need to take into account that joint stock companies are better suited for large businesses;
- Is it possible to obtain the necessary funds in other ways (for example, get a loan from a bank). Here you need to take into account financial feasibility and potential benefits;
- determine the required amount of capital.
2. JSC organization. At this stage the following work is carried out:
A founding agreement is concluded, which stipulates the main activities and characteristics of the business. Moreover, the responsibility of each participant directly depends on the volume of investments made. The founders cannot oblige the JSC to carry out any transactions with third parties; they are prohibited from acting on behalf of the company;
A meeting of the founders is held, where the charter of the joint-stock company is adopted by voting, the valuation of property is approved, and issues of issuing shares are discussed. Management bodies are also formed by the joint-stock company and elected at the meeting. The applicant passes if more than ¾ of all participants vote “for”;
The authorized capital is formed - the minimum amount of funds of the joint-stock company, which in case of anything will guarantee the protection of the interests of creditors. For a joint-stock company, the size of the authorized capital must be no less than 1000 minimum salaries established by law at the time of registration of the joint-stock company. From the moment of registration, more than half of the shares must be purchased. The rest is due within a year.
3. Registration of the institution at the level of government agencies.
Any joint stock company can be liquidated, that is, it ceases to exist as a legal entity. There are several liquidation options:
1. Voluntary liquidation. In this case, the corresponding decision is made at a meeting of shareholders. In this case, the desire to liquidate the JSC is accepted directly by the participants. The process occurs in the following order:
The meeting makes a decision on liquidation;
- the decision is transferred to the state registration authority, which makes the appropriate note. From this moment on, making any changes to the JSC documents is prohibited;
- a liquidation commission is appointed. If one of the participants was a representative of the state, then there must be a representative;
- the commission does everything possible to identify all creditors and receive current debt;
- requests of JSC creditors are satisfied;
- the remaining property is distributed among shareholders.
2. Forced liquidation of a company and liquidation of a company are similar in nature. In our case, the JSC ceases to exist after the court decision is made. In essence, the cessation of the structure’s activities in a general economic format is the will of the market. Reasons for liquidation of a joint stock company may be as follows:
Carrying out activities by the JSC that are not specified in the license or for which there is no appropriate permit;
- violation of laws when performing work;
- performing activities that are prohibited by law;
- violations during registration and their identification by the court. In this case, the latter must recognize the invalidity of all registration documents;
- bankruptcy of a joint-stock company, which is also recognized in court.
Advantages and disadvantages of a joint stock company
From positive traits JSC can be distinguished:
The fact of combining capital is not limited to any limits. A JSC can have any number of investors (even small ones). This feature allows you to quickly raise funds to implement your plans;
When purchasing a certain number of shares, the future shareholder himself makes a decision on the level of risk that he assumes. At the same time, his risk will be limited solely by the amount of investment. In the event of bankruptcy of a joint-stock company, the holder of securities can lose only that part of the funds that no more than invested;
Sustainability. As a rule, joint stock companies are stable formations. If one of the shareholders leaves the JSC, then the organization continues its activities;
Professional management. Capital management is a function of professional managers, not of each shareholder individually. Thus, you can be sure of a competent investment of capital;
Possibility of refund. Shares can be sold in whole or in part at any time;
Various types of profit. Income can be obtained in different ways - from receiving dividends, selling shares, lending securities, and so on;
Kudos. Today, joint stock companies are respected structures, and their members have high social and economic importance;
Availability of capital. JSC always has the opportunity to attract additional funds by issuing loans at favorable interest rates or issuing shares.
Disadvantages of a joint stock company:
A joint-stock company is an open structure, which obliges it to publish reports annually, disclose its profits, and so on. All this - Additional Information for competitors;
Possibility of reducing control over the flow of shares. Often the free sale of securities can lead to sudden changes in the composition of participants. As a result, control over the JSC may be lost;
Conflict of interest. When managing a company, managers and shareholders may have different views on the further development of the structure. The task of the former is to correctly redistribute income to preserve society, and the task of shareholders is to obtain the greatest profit.
Public joint stock company is one of the key concepts of the new classification of business companies. It is distinguished by openness and transparency of investment processes, an unlimited number of shareholders, and more stringent regulations on corporate procedures. It is this form of ownership that most of the largest organizations in the Russian Federation choose.
The concept of “public joint-stock company (PJSC)” is relatively new in the civil legislation of Russia (introduced on September 1, 2014). It denotes a form of organization of a public company whose shareholders have the right to alienate their shares. Its main differences are
- presence of an unlimited number of shareholders
- free placement and circulation of shares on the securities market
- permission not to contribute funds to the authorized capital of the company until it is registered and an account is opened.
The definition of “public” suggests that this type of JSC must adhere to a policy of more complete disclosure of information compared to non-public ones. This helps to increase the transparency and attractiveness of investment processes (shares are placed and circulated among a wide range of people).
The structure of PJSC can be represented as follows (see Fig. 1)
To understand the features of the creation and activities of a PJSC, let’s compare it with other types of joint stock companies and consider examples of existing organizations with this form of ownership.
Public or open?
Since regulations contain several concepts that are close to each other in meaning, even among specialists in corporate law, debates about their legal interpretation continue. Many questions concern the differences between “new” PJSC and “old” OJSC. At first glance, “only the name has changed,” but this is not so (see Table 1)
| Comparison options | ||
|---|---|---|
| Disclosure |
|
|
| Advantage for purchasing shares and securities | It was possible to reflect in the charter the advantage of purchasing free shares by existing shareholders and security holders | |
| Maintaining a register, having a counting commission | It was allowed to maintain the register of shareholders on their own | The register is maintained by third-party organizations that have a license for this type of activity; the registrar is independent |
| Control | A board of directors was required if the number of shareholders exceeded 50 people | It is mandatory to form a collegial body of at least 5 members |
Thus, although the changes related to public joint stock companies do not seem fundamental, ignorance of them can significantly complicate the life of entrepreneurs who have chosen this form of corporatization.
Public or non-public?
From the point of view of a non-specialist, a public joint-stock company in its own words is a former OJSC, and a non-public company is a former CJSC, but this is an overly simplified vision. Let's consider what rules apply in the new classification of business entities to organizations of different legal status:
- A characteristic feature of a PJSC is an open list of prospective buyers of shares, while a non-public joint stock company (NAC) does not have the right to sell its shares through public trading
- The law requires PJSCs to have a clear gradation of issues falling within the competence of members of the board of directors and intended for discussion at the general meeting. NAOs are more free: they can change the collegial governing body to a sole one and carry out other reforms in the activities of governing bodies
- Decisions made by the general meeting and the status of participants in the PJSC need to be confirmed by a representative of the registrar company. The NAO may contact a notary on this issue
- A non-public joint stock company has the right to include in its charter or corporate agreement a clause stating that, in relation to other interested parties, priority in purchasing shares remains with existing shareholders. While for PJSC this is unacceptable
- All corporate agreements concluded in a PJSC must undergo a disclosure procedure. For the NAO, it is sufficient to notify that the contract has been concluded, and its contents can be declared confidential
- All procedures for the repurchase and circulation of securities, which are provided for by Chapter 9 of Law No. 208-FZ, do not apply to organizations that have officially recorded the status of non-public in their charters.
How to re-register an OJSC into a PJSC?
The renaming procedure is carried out by replacing words in the name of the organization. Next, the charter should be revised, especially as it relates to the board of directors and the rights to benefits when purchasing shares, and brought into compliance with the provisions of the legislation on public joint-stock companies.
The Civil Code states that the rules on public companies are applicable only to joint-stock companies whose charter and corporate name directly indicate that they are public. These rules do not apply to other legal entities.
The most famous PJSCs in Russia
The largest representatives of this form of ownership regularly top the rankings of the richest organizations in the country and the world. Here are several legal entities included in the TOP-10 RBC rating for 2015:
In the fall of 2014, changes to the Civil Code came into force in the Federation. They made adjustments to the names and operating principles of certain forms of ownership. Most often, people are interested in what a PJSC is instead of an OJSC. We must understand that at the legislative level the concepts of closed and open societies were simply abolished. Instead of them there will now be public and non-public. These will remain the same associations of shareholders, but some of the nuances of their work will change.
Open societies have the right to exist, but they must amend their charter and become public. Don’t worry about why organizations are renamed. These remain the same companies with the same rights and responsibilities; they simply change their organizational form in accordance with the changed requirements.
But after this renaming, their work is slightly adjusted, because the government has obliged them to make their activities more open. Understanding how a PJSC differs from an OJSC, it becomes clear that public companies are obliged to justify their new name. Previously, it was enough for OJSCs to openly place bonds and shares and make them available on stock exchanges. A lawyer or law firm had to accompany the activities of the JSC. Now a special registrar will have to maintain the register of shares. Meetings should also become more public, everyone decisions made must be certified by a notary or registrar. The difference also becomes noticeable during the mandatory annual audit.
To carry out the renaming, it is necessary to make appropriate changes to the charter, write a statement and provide the minutes of the meeting of shareholders. At the same time, there is no need to pay a state fee for changes in the form of ownership. It is not established by law from what date renaming becomes mandatory. This can be done when other amendments are introduced to the charter. It was possible to change an OJSC to a PJSC as early as September 2014. But even if the company does not make the necessary amendments, the provisions of the Civil Code established for PJSC will still apply to it.
So, they didn’t delay, they made adjustments to the charter and PJSC Sberbank, Gazprom, MTS, and VTB Bank became companies. Their clients have no reason to worry, these are still the same organizations, they just changed the name in accordance with the requirements of the Civil Code. Renamed companies must receive a new seal and re-register bank accounts. They are also required to inform all of their counterparties about the changes. This doesn't mean that they will send emails to everyone; most will simply post the information on the company's website.
