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Russia: Types of Company

Joint Stock Company

Joint stock companies (JSC) may be closed, ie private, or open, ie public. The shares of an open JSC are freely transferable, while in a closed JSC, share transfers are restricted and the other shareholders have pre-emption rights.

The minimum capital requirement for incorporation of a JSC is equivalent to 1,000 minimum monthly wages for an open JSC and 100 minimum monthly wages for a closed JSC. The maximum number of shareholders is unlimited for an open JSC, but cannot exceed 50 for a closed JSC.

A JSC cannot be established and/or owned by a single shareholder if the latter, in turn, has only one shareholder/participant. The governing bodies of a JSC are general shareholders' meetings and the board of directors.

Ordinary and preference (non-voting) shares may be issued; bearer shares are not allowed.

Shares are treated as securities under Russian law, and, therefore, JSCs are subject to securities market regulations, including statutory procedures for issue, offering and placement of shares, registration of shares prospectus, redemption and conversion of shares, issue, offering and placement of convertible securities, keeping of shareholders' register, corporate information disclosure, etc.

At least 50% of a company's foundation capital must be paid up within three months from the company formation (state registration) with the balance of outstanding stock to be paid up within one year from the company formation. All company shares issued at the time of its formation shall be subscribed for by the company founders (incorporators); no public offering or placement is allowed at that stage.



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