PJSC - what is this form of organization? Which is better, JSC or JSC?

Public joint stock company is a new term in Russian civil legislation. At first glance, it may seem that non-public and public joint-stock companies are just new names for CJSC and OJSC. But is this really so?

What does public joint stock company mean?

Federal Law No. 99-FZ dated 05.05.2014 (hereinafter referred to as Law No. 99-FZ) added a number of new articles to the Civil Code of the Russian Federation. One of them, Art. 66.3 of the Civil Code of the Russian Federation, introduces a new classification of joint stock companies. The already familiar CJSC and OJSC have now been replaced by NJSC and PJSC - non-public and. This is not the only change. In particular, the concept of an additional liability company (ALS) has now disappeared from the Civil Code of the Russian Federation. However, they were not particularly popular anyway: according to the Unified State Register of Legal Entities as of July 2014, there were only about 1,000 of them in Russia - with 124,000 closed joint-stock companies and 31,000 open joint-stock companies.

What does a public joint stock company mean? In the current version of the Civil Code of the Russian Federation, this is a joint-stock company in which shares and other securities can be freely sold on the market.

The rules on a public joint stock company apply to a joint-stock company whose charter and name indicate that the joint-stock company is public. For PJSCs created before 09/01/2014, whose corporate name contains an indication of publicity, the rule established by clause 7 of Art. 27 of the Law “On Amendments...” dated June 29, 2015 No. 210-FZ. Such a PJSC that does not have public issues of shares before July 1, 2020 must:

• apply to the Central Bank for registration of the prospectus of shares,
• remove the word “public” from its name.

In addition to shares, a joint-stock company can issue other securities. However, Art. 66.3 of the Civil Code of the Russian Federation provides for public status only for those securities that are converted into shares. As a result non-public companies may introduce securities into public circulation with the exception of shares and securities convertible into them.

What is the difference between a public joint stock company and an open one?

Let's consider difference from JSC. Although the changes are not fundamental, ignorance of them can seriously complicate the life of the management and shareholders of the PJSC.

Disclosure

If previously the obligation to disclose information about the activities of an OJSC was unconditional, now a public company has the right to apply to the Central Bank of the Russian Federation for exemption from it. This opportunity can be taken advantage of public and non-public companies, however, it is for public that liberation is much more relevant.

In addition, JSCs were previously required to include information about the sole shareholder in the charter, as well as publish this information. Now it is enough to enter data into the Unified State Register of Legal Entities.

Preemptive right to purchase shares and securities

The JSC had the right to provide in its charter for cases when additional shares and the securities are subject to preferential purchase by existing shareholders and security holders. Public joint stock company is obliged in all cases to be guided only by the Federal Law “On Joint Stock Companies” dated December 26, 1995 No. 208-FZ (hereinafter referred to as Law No. 208-FZ). References to the charter are no longer valid.

Maintaining a register, counting commission

If for OJSC in in some cases it was allowed to maintain the register of shareholders on its own, then public and non-public joint stock companies are always required to delegate this task to specialized licensed organizations. At the same time, for a PJSC, the registrar must be independent.

The same applies to the counting commission. Now issues within its competence must be resolved by an independent organization that has a license for the relevant type of activity.

Society management

Public and non-public joint-stock companies: what are the differences?

1. By and large, the rules that previously applied to OJSC apply to PJSC. NAO is basically a former closed joint-stock company.
2. The main feature of a PJSC is an open list of possible buyers of shares. NJSC does not have the right to offer its shares at public auction: such a step, by force of law, automatically turns them into a PJSC even without amending the charter.
3. For PJSC, the management procedure is strictly enshrined in law. For example, the rule still remains that the competence of the board of directors or executive body cannot include issues that are subject to consideration by the general meeting. A non-public company can transfer some of these issues to a collegial body.
4. The status of participants and the decision of the general meeting in a PJSC must be confirmed by a representative of the registrar organization. The NAO has a choice: you can use the same mechanism or contact a notary.
5. Non-public joint stock company still has the right to provide in the charter or corporate agreement between shareholders the right to pre-emptive purchase of shares. For public joint stock company such an order is absolutely unacceptable.
6. Corporate agreements concluded in PJSC must be disclosed. For a NAO, it is sufficient to notify the company of the fact of concluding such an agreement.
7. The procedures provided for by Chapter XI.1 of Law No. 208-FZ regarding offers and notifications of repurchase of securities, after September 1, 2014, do not apply to JSCs that, through changes in the charter, have officially recorded their non-public status.

Corporate agreement in joint stock companies

An innovation that largely concerns PJSC and NJSC is a corporate agreement. Under this agreement, concluded between the shareholders, all or some of them undertake to exercise their rights only in a certain way:

• take a unified position when voting;
• establish a common price for all participants for the shares they own;
• allow or prohibit their acquisition in certain circumstances.

However, the agreement also has its limitations: it cannot oblige shareholders to always agree with the position of the managing bodies of the joint-stock company.

In fact, ways to establish a unified position for all or part of the shareholders have always existed. However, now changes in civil legislation have transferred them from the category of “gentleman’s agreements” to the official level. Now, a violation of a corporate agreement may even become a reason to recognize the decisions of the general meeting as illegal.

For non-public companies such an agreement may be an additional means of management. If all shareholders (participants) participate in a corporate agreement, then many issues related to the management of the company can be resolved through changes not in the charter, but in the content of the agreement.

In addition, an obligation has been introduced for non-public companies to enter information about corporate agreements into the Unified State Register of Legal Entities if, under these agreements, the powers of shareholders (participants) seriously change.

Renaming the OJSC into a public joint stock company

For those OJSCs that decided to continue operating in the status public joint stock company, changes need to be made to statutory documents. There is no deadline for this by law, but it’s better not to delay it. Otherwise, problems may arise in relations with counterparties, as well as ambiguity about what rules of law should be applied to PJSC. Law No. 99-FZ establishes that the unchanged charter will be applied to the extent that does not contradict the new norms of the law. However, what exactly is contradictory and what is not is a moot point.

Renaming can occur in the following ways:

1. At a specially convened extraordinary meeting of shareholders.
2. At a meeting of shareholders that resolves other current issues. In this case, changing the name of the JSC will be highlighted as an additional issue on the agenda.
3. At the mandatory annual meeting.

Re-registration of old organizations into new public and non-public legal entities

The changes themselves can only affect the name - it is enough to exclude the words “open joint-stock company” from the name, replacing them with the words “ public joint stock company" However, it is necessary to check whether the provisions of the previously existing charter do not contradict the norms of the law. In particular, special attention should be paid to the rules relating to:

• board of directors;
• preemptive right of shareholders to purchase shares.

In accordance with Part 12 of Art. 3 of Law No. 99-FZ, the company will not need to pay state duty if the changes concern bringing the name into compliance with the law.

In addition to JSC, signs of publicity and non-publicity now apply to other organizational forms of legal entities. In particular, the law now directly classifies LLCs as non-public entities. For a public joint stock company, changes must be made to the charter. But is this necessary for those companies that, by virtue of the new law, should be considered non-public?

In fact, for non-public companies, making changes is not necessary. Nevertheless, it is still advisable to make such changes. This is especially important for former closed joint stock companies. Otherwise, such a name will be a defiant anachronism.

Sample charter of a public joint stock company: what to pay attention to?

In the time that has elapsed since the adoption of Law No. 99-FZ, many companies have already gone through the procedure of registering changes to the charter. Those who are just about to do this can use the sample charter of a PJSC.

However, when using a sample, you must first of all pay attention to the following:

• The charter must contain an indication of publicity. Without this, society becomes non-public.
• It is imperative to involve an appraiser in order for a property contribution to be made to the authorized capital. Moreover, in the event of an incorrect assessment, both the shareholder and the appraiser must answer subsidiarily within the limits of the overstatement amount.
• If there is only one shareholder, he may not be indicated in the charter, even if the sample contains such a clause.
• It is possible to include provisions on the audit procedure in the charter at the request of shareholders owning at least 10% of the shares.
• Convert to non-profit organization is no longer allowed, and there should not be such norms in the charter.

This list is far from complete, so when using samples you should carefully check them with current legislation.

The term "public joint stock company": translation into English

Since many Russian PJSCs carry out foreign trade operations, the question arises: what should they now be officially called in English?

Previously, the English term “open joint-stock company” was used in relation to JSC. By analogy with it, the current public joint stock companies can be called a public joint-stock company. This conclusion is confirmed by the practice of using this term in relation to companies from Ukraine, where PJSCs have existed for a long time.

In addition, the difference in right-wing terminology in English-speaking countries should also be taken into account. Thus, by analogy with UK law, the term “public limited company” is theoretically acceptable, and with US law - “public corporation”.

The latter, however, is undesirable, since it may mislead foreign counterparties. Apparently, the public joint-stock company option is optimal:

• it is used mainly only for organizations from post-Soviet countries;
• quite clearly marks the organizational and legal form of society.

So, what can ultimately be said about innovations in civil legislation concerning public and non-public legal entities? In general, they make the system of organizational and legal forms for commercial organizations in Russia more logical and harmonious.

It is not difficult to make changes to the statutory documents. It is enough to rename the company according to the new rules of the Civil Code of the Russian Federation. A step forward can be considered the legalization of agreements between shareholders (corporate agreement in accordance with Article 67.2 of the Civil Code of the Russian Federation).

Leader of the Russian banking system occupies a leading position in the credit rating. In 2018, in terms of key indicators (assets, capital, loan portfolio, profit, deposits of individuals, investments in securities), Sberbank PJSC ranks first among Russian banks. But what does the name PJSC Sberbank mean, and how does it stand for it?

Renaming from OJSC to PJSC Sberbank means a change in the organizational and legal form of the financial organization. The procedure was related to state requirements and was enshrined in law.

PJSC Sberbank, whose abbreviation is a public joint-stock company, officially changed its form of ownership on August 4, 2015. This operation must be carried out by all OJSCs, in accordance with the changes made to the Civil Code of the Russian Federation. There are no cut-off dates for the procedure; it all depends on the specific enterprise.

Structure of PJSC Sberbank

The government justifies this need increasing control over all JSCs. In particular, this concerns the mandatory annual audit of the company’s accounting department. It is believed that the procedure will minimize or eliminate the risk of conducting “black”, double accounting.

The main difference between a PJSC is that there are no restrictions on the number of shares owned by one citizen.

Other differences between OJSC and PJSC include:

• In the event of bankruptcy, the shareholders of the OJSC are liable only to the extent of the funds spent on the acquisition of shares; they do not risk other funds;
• Shareholders of PJSC bear subsidiary liability. If the company's property is insufficient, shareholders who influence the management of the bank are responsible for its obligations (if bankruptcy is caused by the actions of members of the company).

But there are no significant differences between forms of ownership.

What changed after changing the name to PJSC?

This re-registration occurs in conjunction with amendments to the Charter, therefore, relevant clauses were added to the Bank’s Charter, explaining the principles of relationships under the new organizational form, and irrelevant sections were removed. Two copies of it, the minutes of the shareholders' meeting and a statement of the established form were transferred to the tax service, as prescribed for the procedure. After the official name change, financial institution completed the following mandatory actions:

1. The seal has been changed.
2. The name on the website, on signs, and in the mailbox has been changed.
3. All clients were warned about the new form of ownership and the need to enter the correct details when filling out documents.
4. If necessary or at the request of counterparties, accounts, contracts, agreements are reissued.

After changing the form of ownership, the bank details changed (OJSC to PJSC), but INN, BIC, OGRN, correspondent accounts, addresses and telephone numbers remained the same. After the new name comes into force, a number of documents (settlement, administrative, accounts) containing the previous name are not taken into account as illegal. The changes do not apply to such situations.

In the economic conditions of our state, there may be legally established types of business entities. An enterprise, based on its operating conditions, can choose any approach.

Joint-stock companies were previously divided into open (OJSC) and closed (CJSC) types. Current legislation has abolished these names. Today the closed joint-stock company has been renamed into joint-stock company. This form of management has retained certain features of the organization of activities.

How an OJSC differs from a JSC will be discussed further. Each business owner can decide to reorganize his company from one form to another.

General concept

Need to consider general concept principles of organization in order to conclude how a JSC differs from an OJSC. Companies of this type are created by several founders. They pool their resources, forming authorized capital from your property. To record their participation, special securities (CS) are issued. They are called common shares.

When creating a company, the relevant documentation indicates how many securities and what denomination will be in circulation. The conditions for the distribution of shares are determined by the status of the company itself.

At the end of the reporting period, each shareholder can receive a return in the form of a portion of the net profit. It is proportionally equal to the share that the founder contributed to the authorized capital. Such securities also give their owner certain rights.

Features of the organization

There are several features in the principles of creation and operation. What is the difference between an OJSC and a JSC, what is the difference? This will become clear when considering the operating principles of such companies.

If the number of shareholders who founded the company does not exceed 50 people, it is a joint-stock company. This organizational form is acceptable for medium-sized businesses. But this is not the only difference. The main principle by which the represented enterprises are divided into JSC and OJSC is the distribution of shares.

The number of shareholders who form the authorized capital of the JSC is not limited. Therefore, this operating principle is more suitable for large businesses. The authorized capital upon creation must be at least 1000 minimum wages (minimum wage). In JSC securities can only be purchased by a certain circle of persons. Moreover, the authorized capital in this form of management is less than 100 minimum wages.

The JSC may not publicly present the results of its activities for the reporting period. OJSC, on the contrary, is obliged to provide such information openly.

Fundamental differences

Exists a whole series features that the assigned status of the company implies upon creation. The fundamental difference There is an approach to the implementation of the Central Bank. The JSC distributes its shares freely, without coordinating this process with other founders. Medium-sized enterprises can sell securities only after the consent of all persons who contributed their share to the authorized capital.

This is one of the main principles of how an OJSC differs from a JSC. For employees of the first of them, there is the opportunity to purchase shares of the enterprise where they work. Also, not only individuals, but also legal entities have the right to acquire a share in the authorized capital. If desired, each employee who owns securities can implement them. But in a JSC, only the founder can be a shareholder ( individual).

Shareholders' Rights

Considering how an OJSC differs from a JSC, it is necessary to say a few words about the rights of shareholders. In each of the presented forms of organizing the company’s activities, the owner of such securities has the right to vote when making decisions regarding the subsequent operation of their enterprise. The more shares a subject has, the more weighty his opinion is when voting. If a shareholder owns 50% + 1 share, he completely controls this enterprise.

The liability of the owners of such securities is limited only to the share that they contributed when creating the company (except for cases provided for by law).

The shareholder of an OJSC has the right, at his own discretion, to sell the securities without informing others. But for a company organized as a joint-stock company, this is unacceptable. The sale of shares in this case is possible only after the consent of all founders.

Advantages

Considering how an OJSC differs from a JSC, a few words should be said about the advantages of each form of business. For medium-sized businesses, it is easier to organize an enterprise with a relatively small authorized capital. Such a company does not have to provide publicly information about its activities.

An OJSC has the advantage of investors being interested in providing additional financial resources to such an organization. Thanks to the transparency of accounting records and the provision of information about the results of the enterprise’s activities, the credit rating of such companies is high. This opens up new perspectives and opportunities for them.

Having considered how an OJSC differs from a JSC, we can highlight the pros and cons of each form of business. Regarding the existing business conditions, the company chooses a more suitable option for its activities.

We are all used to thinking that business is a closed area, and you can get into it if you have a profitable idea, finances and partners. Buying shares for a long time in Russia it was not considered a profitable investment, since there was no trading in securities as such. But since 2015, after the transfer of shares into book-entry form, the situation on the stock market has changed for the better. Shares have become a liquid commodity.

Entrepreneurs were also interested in the innovations; they received another tool for attracting investment in their business. But, of course, you can use it only if you organize your enterprise in the form of a public joint-stock company (PJSC).

What is a public joint stock company?

Public joint stock company (abbreviation PJSC) is the name of the organizational and legal form of a business entity. On English language this term translates as public corporation. In addition to PJSC, there are also LLC, JSC, general partnerships, production cooperatives, etc.

PJSC – commercial enterprise, the authorized capital of which is divided into shares, and these shares are freely traded on the stock market. What follows from this definition?

• PJSC is a legal entity whose goal is to obtain commercial profit (there are no non-profit PJSCs);
• you can do any kind of work economic activity and make a profit from it (trading its own shares cannot be the main direction of a PJSC);
• The PJSC puts up for public auction the right to participate in its authorized capital, recognizes the buyer as its participant, vests management powers and pays it a portion of the profit;
• the company cannot choose its shareholders, and anyone has the right to buy shares put up on the stock market.

Distinctive features of JSC and LLC:

The procedure for the creation and functioning of public joint-stock companies is enshrined in Federal Law No. 208 “On Joint-Stock Companies.” This law provides for the following procedure:

• the founders sign an agreement on the creation of a PJSC, where they indicate the name of the future legal entity, the size of the authorized capital (at least 100,000 rubles), the number of common and preferred shares, the procedure for assessing the contributions of each founder, etc.;
• according to the agreement on the creation of the PJSC, the founders distribute among themselves the primary stake (actual payment of the nominal value of 50% of the stake must be made within 3 months from the date of state registration of the PJSC, full redemption - within a year);
• a protocol on the establishment of the company and the Charter are drawn up and signed;
• PJSC is registered with the Federal Tax Service and the Social Insurance Fund;
• opening a bank account;
• The first issue is registered with the Central Bank and an agreement is concluded with the official registrar who will maintain the register of shareholders.

Important: Since 2014, the abbreviation OAO, which stood for open joint-stock company, has not been used in Russia.

Charter

The only document of title of a public joint stock company is its Charter. It is developed for each PJSC and is individual in nature, although it must also reflect mandatory conditions.

• name and legal address;
• list of activities;
• authorized capital and data on shares (quantity, nominal value, types, etc.);
• rights of owners of common and preferred shares;
• procedure for convening a general meeting of shareholders;
• executive bodies of PJSC, their competence.

Important: each shareholder has the right to receive from the PJSC a certified copy of the current Charter (the cost of issuing a copy should not exceed the cost of paper and copying).

Changes to the Charter are made by decision of the general meeting of shareholders. In the case of an additional issue of shares, amendments related to an increase in the authorized capital may be accepted by the executive body, but this right must be recorded in the Charter itself.

Advice: An analysis of the activities of a PJSC should begin with a study of the Charter. Any discrepancy between the activities of a joint-stock company and the charter provisions entails adverse legal consequences.

Shareholders' Rights

A person receives shareholder rights after purchasing a share and entering information about the purchase into the shareholder register. After securing the data, the shareholder can receive an extract from the register.

All shareholder rights can be divided into four categories related to:

• share ownership;
• PJSC management;
• partly in the profit and property of the company;
• non-property rights.

Rights based on share ownership include:

• possibility of sale;
• pledge;
• donation;
• inheritance;
• exchange, etc.

The shareholder exercises these rights within the framework of ordinary contracts, taking into account the specifics of the Federal Law “On the Securities Market”. The shareholder exercises the right to manage the PJSC at regular and extraordinary general meetings. The issues that shareholders can decide are determined by the Charter. Here are the main ones:

• amendment of the Charter;
• election or re-election of executive bodies, members of the audit commission and auditor;
• amount and procedure for payment of dividends;
• approval of annual reports;
• approval of significant transactions, etc.

Duration and procedure for notifying the shareholder about the meeting: 20 days before it is held by registered mail or by courier mail.

The shareholder has the right to a percentage of the profit during the operation of the PJSC and to a part of the property upon liquidation of the business entity.

Important: if the enterprise has neither profit nor property, then the shareholder cannot demand any payments in his favor.

Personal non-property rights include the right to information and compensation for moral damage caused by unlawful actions of the PJSC.

Controls

PJSC has a rather complex structure of executive bodies, each of which is endowed with its own competence, defined by the Charter.

Some executive functions are performed by the meeting of shareholders:

• approval of reporting;
• profit distribution;
• approval of internal documents of the company, etc.

The general meeting does not decide current economic issues, does not inspect the work of departments, does not give instructions and instructions to individual employees, does not fire or hire personnel.

Management of current economic activities is the task of the general director and the board. These executive bodies are appointed by the board of directors. The Board is involved in:

• development of priority areas of the company’s activities;
• organization accounting;
• disposal of property and finances;
• conclusion employment contracts and contracts with personnel, etc.

One of the key governing bodies is the board of directors.; he is elected by the shareholders for the general management of the company. Board of Directors:

• convenes annual and extraordinary meetings of shareholders;
• gives orders to the head of the organization;
• makes decisions on reducing and increasing the authorized capital, if provided for by the Charter;
• approves decisions on additional issue (issue of shares);
• recommends the amount of dividends per share, etc.

Supervision over the financial activities of the company is carried out by an audit commission, which is elected by the meeting of shareholders.

Responsibility of participants

Shareholders are responsible to society for fulfilling their obligations. The owner of shares is obliged:

• pay for shares;
• maintain confidentiality;
• promptly notify the registrar (the person registering shares) about changes in your data;
• do not allow actions that may cause harm to the property or non-property rights and interests of the PJSC.

Responsibility for non-payment of shares is deprivation of the right to vote at general meetings. If, as a result of a violation of confidentiality rules or in case of untimely notification of the registrar about changes in personal data, the shareholder causes losses to the company, then the PJSC may recover material and moral damages in court.

Important: if you (the owner of the shares) do not attend the meeting of shareholders, and due to your failure to appear, the work of the entire organization is blocked, then the PJSC may make a claim against you and demand compensation for damages.

The responsibility of a shareholder to other business entities entering into relations with the company is determined only by the value of the shares that he owns. If a PJSC has fallen and is facing bankruptcy, then all that a shareholder can lose is their shares.

How does a public joint stock company differ from a non-public one?

A non-public joint-stock company is a joint-stock company that does not offer its shares for public sale. In civil legislation, the abbreviation AO is used for this organizational and legal form, which stands for non-public joint stock company. There is no abbreviation NAO.

The main differences between JSC and PJSC:

In addition, for JSC there is a lower authorized capital threshold - at least 10,000 rubles, there are no requirements for annual publication financial statements and limited maximum quantity shareholders – 50 entities (individuals and legal entities).

Let's sum it up

The opportunities of a public joint stock company are of interest both to ordinary citizens, who can purchase shares, become co-owners of production assets and receive dividends annually, and to business entities. The latter get a chance to increase their own capital and successfully promote their brand on the market.

In addition, a development opportunity has emerged around the growing stock market activity. These are consulting, auditing, and brokerage companies that support the activities of joint-stock companies, create new jobs and contribute to the formation of the national gross product.

Greetings, dear readers. When opening an individual entrepreneur, everything is simple, just select the right types activities and choose the optimal form of taxation. In the case of an LLC, everything is more complicated, and in the case when there are many founders, and everything is planned to be done either through a closed joint-stock company or through an open joint-stock company, then the number of differences begins to go off scale. We have collected the most critical differences in one place, you can study the advantages and disadvantages of each type of legal entity organization form, and choose the most optimal one for you. Happy business!

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LLC, CJSC, OJSC: differences and features in simple words, table

When starting a business, every businessman thinks about the organizational and legal form of his future enterprise. He can register a company without forming a legal entity and engage in individual entrepreneurship or register as a legal entity. How are they different - in simple words.

The most common legal entities are LLC, CJSC, OJSC. Each of them has both advantages and disadvantages. Below we will discuss the differences and similarities between LLCs, CJSCs, and OJSCs. However, first of all, let's look at the difference between legal entities.

This is very important, since even lawyers have a huge number of misconceptions about these forms of business, which often leads to unintended consequences.

Legal entity and individual – what is the difference?

The main difference in these concepts is that an individual entrepreneur is an individual with a certain status, while a legal entity is a fiction (they exist only legally, without material embodiment).

In accordance with the law, an individual must be liable for obligations with his property. And in accordance with this, we can conclude that for debts that were incurred while doing business, individual entrepreneur you will have to pay even with property that had nothing to do with the business.

The responsibilities of participants and shareholders are different. Unlike individual entrepreneurs, legal entities are liable for the obligations only of their organization and risk only the value of their shares or shares. Therefore, under unfavorable circumstances, participants in such companies are not responsible for the activities of the organizations.

It can be noted that in this regard, creating a legal entity is more attractive than acquiring the status of an individual entrepreneur.

Advantages of a limited liability company and their types

Now we see the differences between LLC, OJSC, CJSC, and individual entrepreneurs and we can move on to a more detailed examination of the characteristics of LLC, which is the most popular way of doing business in our country. This is justified by its simple registration and subsequent operation.

As already noted, LLC participants risk liabilities only to the extent of the amounts corresponding to their share in the business. It should be noted that the shares of LLC participants are not securities, therefore they are not subject to the provisions of securities legislation. This fact allows you to increase the authorized capital faster and easier than in joint stock companies.

Similarities and differences between a limited liability company, a public limited company and a private limited company

Consider the features of other legal entities.

The form of doing business in joint stock companies is more complex than in LLCs. LLC and JSC have a number of differences - both have their pros and cons.

Below is a comparative table of LLC, OJSC, CJSC in one word.

This table shows all the advantages of an LLC over other commercial legal entities:

• greater simplification of the registration procedure;
• no need for an issue;
• optional publication of information about your activities;
• the ability to change the organizational and legal form with fewer problems.

Transformation of CJSC and OJSC into PJSC NAO and LLC, what is it: Video

Authorized capital and profit

In conclusion, we will consider the features of finance of LLC, CJSC, OJSC.

The authorized capital of an OJSC is no less than a thousand times the minimum wage, and a CJSC is no less than a hundred times. Then the minimum for the authorized capital of an LLC is ten thousand rubles.

Increasing the authorized capital of an LLC is much easier than that of a JSC, because this can only be done after registering the issue of shares, which is a rather expensive procedure. And finally, in all the considered forms of entrepreneurship, profits are distributed in the form of dividends, which increases the tax burden on organizations.

In general, depending on the planned type of business and the number of founders, you can choose a suitable form of business from those discussed above.

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The difference between a closed joint stock company and an LLC - what are they, differences from individual entrepreneurs

IN everyday life We often come across dozens of different abbreviations that denote legal forms of economic activity: LLC, CJSC, NPO, individual entrepreneur and much more.

Why are economic entities called differently if, de facto, they are engaged in the same business? LLC and CJSC are especially often confused, although these legal forms differ significantly from each other. Despite the apparent simplicity of the terms, it is worth studying them more carefully and understanding the main differences.

A closed joint-stock company is a joint-stock company whose authorized capital is divided between participants through shares. The key characteristic of a legal form is its “closedness”. The number of shareholders cannot exceed 50 people, while shares are alienated only among a limited circle of persons, which include the founders.

The free circulation of shares of the enterprise is difficult, which is due to the peculiarities of the activity. If the number of persons holding shares has increased to 51 people or more, the association is subject to re-registration as an OJSC within a year.

LLC is a commercial company, the authorized capital of which is divided in certain shares between the founders.

This legal form is one of the most popular in Russia due to simple registration, loyalty of legislation, as well as other factors. An LLC may include no more than 50 people, and the participants have the right to engage in various types commercial activities.

Thus, the maximum number of participants in LLCs and CJSCs is the same: it should not exceed 50 people. In addition, participants in both types of commercial entities do not need to publish their reports annually. The authorized capital of an LLC cannot be less than 10 thousand rubles, and for a closed joint-stock company the minimum value is 100 minimum wages (that is, also 10 thousand rubles).

To start operating an LLC, it is necessary to prepare documents in the form of a constituent agreement and charter, for a closed joint stock company - only the charter. The joint stock company issues securities that are subject to registration with the Central Bank. It is possible to increase the authorized capital of a closed joint-stock company only through an additional issue of shares. The management structure of the LLC has a general meeting and general manager, and the CJSC has a board of directors.

Conclusions

1. Change of composition. If the founder of an LLC alienates his share, then this transaction requires mandatory state registration, and the data is entered into the Unified State Register of Legal Entities. When alienating shares of a closed joint-stock company, no changes are made to the register, and notarization is not required.
2. Increase in authorized capital. An LLC can increase the share of participants by amending its constituent documents. To increase the authorized capital of a closed joint-stock company, an additional issue is required.
3. Access to information about participants. Information about the founders of an LLC is in the public domain, information about the shareholders of a closed joint-stock company is closed.
4. Management structure. An LLC has only a general director and a general meeting, while a CJSC also has a board of directors.

From the site: https://thedifference.ru/chem-otlichaetsya-zao-ot-ooo/

What is the difference between OJSC and CJSC and LLC?

The main difference between LLC and CJSC is the division of the authorized capital into shares of participants in the company with limited liability and for shares – in a closed joint stock company.

According to the charter of an LLC, the issue of shares is not possible, and shares of a closed joint stock company are securities that are subject to securities laws. JSC participants are obliged to comply with these laws and bear responsibility in case of their violation.

The procedures for increasing the authorized capital in LLC and CJSC are also different. An increase in the authorized capital of an LLC occurs after documents with the consent of all participants.

In a closed joint stock company, for this purpose, it is necessary to issue new shares, therefore, due to numerous costs, this procedure is much more complicated: additional shares are issued and changes are made to the company's charter, their state registration is required, as well as registration of additional shares.

The charter of an LLC can be drawn up in such a way that the organization can be closed to access by third parties - it can be completely prohibited and significantly limit the possibility of new participants joining.

This is achieved by prohibiting in the LLC charter the possibility of alienation by participants of their shares in favor of third parties or if it is necessary to obtain the consent of all LLC participants for the entry of third parties. As for the closed joint stock company, its charter is drawn up in such a way that the appearance of third parties among the participants is possible in the event of gratuitous alienation of shares in their favor by one of the existing participants.

The receipt of profit by the LLC participants is stipulated in the charter; it does not directly depend on the shares of the participants.

CJSC participants receive dividends, the amount of which directly depends on the category of shares they own. The law also provides for the timing of the payment of dividends to the participants of a closed joint stock company. All information about the participants of an LLC and their shares in the enterprise is contained in the Unified State Register of Legal Entities, and anyone can request an extract with the data of a particular LLC. Data about the participants of the closed joint-stock company are entered into a special register of shareholders, the information in which is closed to unauthorized persons.

An open joint stock company (OJSC) is created to conduct business on a large scale, all of its shares are in free circulation. Shareholders may alienate their shares to third parties without coordinating their actions with other participants of the JSC. Subscription to issued shares can be either open or closed.

The number of shareholders of an OJSC is not limited, and the authorized capital must be at least 100 thousand. There are also differences between forms of ownership in the methods of liquidation of a legal entity, and the liquidation of an LLC differs from the liquidation of joint stock companies.

From the site: http://www.ufreg.com/novosti/chem-otlichaetsya-oao-ot-zao-i-ooo.html

What is the difference between an LLC and a CJSC: the main differences and features

People who want to start an independent business are often interested in the similarities and differences in the organization of the most popular commercial structures, namely a closed joint stock company and a company whose liability for debts is limited by the size of its authorized capital.

But in 2009, the legislation changed, and since then the procedure for selling such companies has become much more complicated. Therefore, businessmen began to register their newly created companies and firms as closed joint stock companies.

What is the similarity between a closed joint stock company and a company whose liability for debts is limited by its authorized capital? Let us examine in more detail the differences, as well as the pros and cons of LLC and CJSC. Firstly, both companies are commercial structures, dividing their authorized capital into parts in accordance with the number of founders of a particular company of one of the two above-mentioned types.

Secondly, the minimum amount of their authorized capital required by law is exactly the same, and amounts to ten thousand rubles.

Thirdly, the owner of the property of both types of companies, regardless of whether it was formed through the contributions of its founders and other participants or appeared in the process of carrying out economic activities, is this company itself, and not its participants (founders ).

Fourthly, both CJSC and LLC have only their Charter as a constituent document, and the law does not require any information about their founders to be provided in this document, nor is it required to indicate their total number.

Fifthly, when registering a company of both types, its founders draw up an agreement on the creation of a new commercial structure, which legal force does not have a constituent document.

Sixth, both CJSC and LLC can be created by only one person, who is called the sole founder.

Seventh, the founders of both types of society can only be citizens, only existing commercial and other structures, or both.

Eighth, the law provides participants of both CJSC and LLC with the right to be informed about the state of affairs of the relevant company, the right to familiarize themselves in the prescribed manner with the summary documents of the accounting carried out by it, the right to jointly distribute the income received by the company, and upon completion of the liquidation process - the right to receiving part of the property of a CJSC or LLC in kind, or its value in money.

Ninth, for the debts of both the CJSC and the LLC, its participants bear exclusively additional, or so-called. subsidiary liability, i.e. they must pay them only if the property and funds of such a society itself are not enough to pay them off.

CJSC and LLC differ from each other only in the way a participant leaves its membership. Legally, there is no possibility for shareholders of closed joint-stock companies to exit them: they can only sell or donate the shares they own.

With their alienation, the membership of the participant who parted with these securities in the corresponding CJSC also terminates. The participants of the LLC, who do not issue any securities, donate or sell their shares in order to leave it. That is, the whole difference lies in the fact that in the first case we are talking about shares that can be issued both in the form of a document (printed) and in uncertificated form, and in the second case we are talking about shares, the presence of which is confirmed only by the relevant records.

From the site: https://wikilaw.ru/biznes/chem-otlichaetsya-ooo-ot-zao/

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 traded open access, T.

From September 1, 2014 Russian Federation No. 99-FZ 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 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 have a more open information policy: hold shareholder meetings more often, allow inspections, etc. 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.

From the site: http://www.ami-tass.ru/news/chem-otlichaetsya-pao-ot-oao.html

What is the difference between a public joint stock company and an OJSC?

What does public joint stock company mean?

Federal Law No. 99-FZ dated May 5, 2014 (hereinafter referred to as Law No. 99-FZ) added a number of new articles to the Civil Code of the Russian Federation. One of them, Art.

66.3 of the Civil Code of the Russian Federation, introduces a new classification of joint stock companies. The already familiar CJSC and OJSC have now been replaced by NAO and PJSC - non-public and public joint-stock companies. This is not the only change.

What does a public joint stock company mean? In the current version of the Civil Code of the Russian Federation, this is a joint-stock company in which shares and other securities can be freely sold on the market.

The rules on a public joint stock company apply to a joint-stock company whose charter and name indicate that the joint-stock company is public. For PJSCs created before 09/01/2014, whose corporate name contains an indication of publicity, the rule established by clause 7 of Art. 27 of the Law “On Amendments...” dated June 29, 2015 No. 210-FZ. Such a PJSC that does not have public issues of shares before July 1, 2020 must:

• apply to the Central Bank for registration of the prospectus of shares,
• remove the word “public” from its name.

In addition to shares, a joint-stock company can issue other securities. However, Art. 66.3 of the Civil Code of the Russian Federation provides for public status only for those securities that are converted into shares. As a result, non-public companies can put securities into public circulation with the exception of shares and securities convertible into them.

What is the difference between a public joint stock company and an open one?

Let's consider the difference from an OJSC public joint stock company. Although the changes are not fundamental, ignorance of them can seriously complicate the life of the management and shareholders of the PJSC.

Disclosure

If previously the obligation to disclose information about the activities of an OJSC was unconditional, now a public company has the right to apply to the Central Bank of the Russian Federation for exemption from it. Public and non-public societies can take advantage of this opportunity, but it is for public ones that the exemption is much more relevant.

In addition, JSCs were previously required to include information about the sole shareholder in the charter, as well as publish this information. Now it is enough to enter data into the Unified State Register of Legal Entities.

Preemptive right to purchase shares and securities

The OJSC had the right to provide in its charter for cases when additional shares and securities are subject to preferential purchase by existing shareholders and security holders. A public joint stock company is obliged in all cases to be guided only by the Federal Law “On Joint Stock Companies” dated 26.

Maintaining a register, counting commission

If in some cases an OJSC was allowed to maintain the register of shareholders on its own, then public and non-public joint stock companies are always required to delegate this task to specialized organizations that have a license. At the same time, for a PJSC, the registrar must be independent.

The same applies to the counting commission. Now issues within its competence must be resolved by an independent organization that has a license for the relevant type of activity.

Society management

For an OJSC, the board of directors was a mandatory body only if the number of shareholders of the company was more than 50. Now, a collegial body with at least 5 members is an integral part of the PJSC. You can learn how to draw up a regulation on such a body from the article Regulations on the Board of Directors of a JSC - sample.

Public and non-public joint-stock companies: what are the differences?

1. By and large, the rules that previously applied to OJSC apply to PJSC. NAO is basically a former closed joint stock company.
2. The main feature of a PJSC is an open list of possible buyers of shares. NJSC does not have the right to offer its shares at public auction: such a step, by force of law, automatically turns them into a PJSC even without amending the charter.
3. For PJSC, the management procedure is strictly enshrined in law. For example, the rule still remains that the competence of the board of directors or executive body cannot include issues that are subject to consideration by the general meeting. A non-public company can transfer some of these issues to a collegial body.
4. The status of participants and the decision of the general meeting in a PJSC must be confirmed by a representative of the registrar organization. The NAO has a choice: you can use the same mechanism or contact a notary.
5. A non-public joint stock company still has the right to provide in the charter or corporate agreement between shareholders the right to pre-emptive purchase of shares. For a public joint stock company, such an order is absolutely unacceptable.
6. Corporate agreements concluded in PJSC must be disclosed. For a NAO, it is sufficient to notify the company of the fact of concluding such an agreement.
7. The procedures provided for by Chapter XI.1 of Law No. 208-FZ regarding offers and notifications of repurchase of securities, after September 1, 2014, do not apply to JSCs that, through changes in the charter, have officially recorded their non-public status.

Corporate agreement in joint stock companies

An innovation that largely concerns PJSC and NJSC is a corporate agreement. Under this agreement, concluded between the shareholders, all or some of them undertake to exercise their rights only in a certain way:

• take a unified position when voting;
• establish a common price for all participants for the shares they own;
• allow or prohibit their acquisition in certain circumstances.

However, the agreement also has its limitations: it cannot oblige shareholders to always agree with the position of the managing bodies of the joint-stock company.

In fact, ways to establish a unified position for all or part of the shareholders have always existed. However, now changes in civil legislation have transferred them from the category of “gentleman’s agreements” to the official level. Now, a violation of a corporate agreement may even become a reason to recognize the decisions of the general meeting as illegal.

For non-public companies, such an agreement may be an additional management tool. If all shareholders (participants) participate in a corporate agreement, then many issues related to the management of the company can be resolved through changes not in the charter, but in the content of the agreement.

In addition, an obligation has been introduced for non-public companies to enter information about corporate agreements into the Unified State Register of Legal Entities if, under these agreements, the powers of shareholders (participants) seriously change.

Renaming the OJSC into a public joint stock company

For those OJSCs that decide to continue operating as a public joint stock company, changes are required to the charter documents. There is no deadline for this by law, but it’s better not to delay it.

Otherwise, problems may arise in relations with counterparties, as well as ambiguity about what rules of law should be applied to PJSC. Law No. 99-FZ establishes that the unchanged charter will be applied to the extent that does not contradict the new norms of the law. However, what exactly contradicts and what does not is a moot point.

Renaming can occur in the following ways:

1. At a specially convened extraordinary meeting of shareholders.
2. At a meeting of shareholders that resolves other current issues. In this case, changing the name of the JSC will be highlighted as an additional issue on the agenda.
3. At the mandatory annual meeting.

Re-registration of old organizations into new public and non-public legal entities

The changes themselves can only affect the name - it is enough to exclude the words “open joint-stock company” from the name, replacing them with the words “public joint-stock company”. However, it is necessary to check whether the provisions of the previously existing charter do not contradict the norms of the law. In particular, special attention should be paid to the rules relating to:

• board of directors;
• preemptive right of shareholders to purchase shares.

In accordance with Part 12 of Art. 3 of Law No. 99-FZ, the company will not need to pay state duty if the changes concern bringing the name into compliance with the law.

In addition to JSC, signs of publicity and non-publicity now apply to other organizational forms of legal entities. In particular, the law now directly classifies LLCs as non-public entities. For a public joint stock company, changes must be made to the charter. But is this necessary for those companies that, by virtue of the new law, should be considered non-public?

In fact, for non-public companies, making changes is not necessary. Nevertheless, it is still advisable to make such changes. This is especially important for former closed joint stock companies. Otherwise, such a name will be a defiant anachronism.

Sample charter of a public joint stock company: what to pay attention to?

In the time that has elapsed since the adoption of Law No. 99-FZ, many companies have already gone through the procedure of registering changes to the charter. Those who are just about to do this can use the sample charter of a PJSC.

However, when using a sample, you must first of all pay attention to the following:

• The charter must contain an indication of publicity. Without this, society becomes non-public.
• It is imperative to involve an appraiser in order for a property contribution to be made to the authorized capital. Moreover, in the event of an incorrect assessment, both the shareholder and the appraiser must answer subsidiarily within the limits of the overstatement amount.
• If there is only one shareholder, he may not be indicated in the charter, even if the sample contains such a clause.
• It is possible to include provisions on the audit procedure in the charter at the request of shareholders owning at least 10% of the shares.
• Conversion into a non-profit organization is no longer allowed, and there should be no such provisions in the charter.

This list is far from complete, so when using samples you should carefully check them with current legislation.

The term "public joint stock company": translation into English

Since many Russian PJSCs carry out foreign trade operations, the question arises: what should they now be officially called in English?

Previously, the English term “open joint-stock company” was used in relation to JSC. By analogy with it, current public joint stock companies can be called public joint-stock companies. This conclusion is confirmed by the practice of using this term in relation to companies from Ukraine, where PJSCs have existed for a long time.

In addition, the difference in right-wing terminology in English-speaking countries should also be taken into account. Thus, by analogy with UK law, the term “public limited company” is theoretically acceptable, and with US law - “public corporation”.

The latter, however, is undesirable, since it may mislead foreign counterparties. Apparently, the public joint-stock company option is optimal:

• it is used mainly only for organizations from post-Soviet countries;
• quite clearly marks the organizational and legal form of society.

So, what can ultimately be said about innovations in civil legislation concerning public and non-public legal entities? In general, they make the system of organizational and legal forms for commercial organizations in Russia more logical and harmonious.

It is not difficult to make changes to the statutory documents. It is enough to rename the company according to the new rules of the Civil Code of the Russian Federation. A step forward can be considered the legalization of agreements between shareholders (corporate agreement in accordance with Article 67.2 of the Civil Code of the Russian Federation).

From the site: https://rusjurist.ru/akcionernye_obwestva_ao/publichnoe_akcionernoe_obwestvo/v_chem_otlichie_publichnogo_akcionernogo_obwestva_ot_oao/

Comparison of LLC and JSC

From the site: http://www.yurprestizh.ru/sravn

COMPARISON OF LIMITED LIABILITY COMPANY (LLC) AND JOINT STOCK COMPANIES (CJSC AND JSC)

Zezekalo Alexander Yurievich

Ph.D. legal Sciences, Associate Professor KhSU, Abakan

A limited liability company is a business company whose authorized capital is divided into shares of sizes determined by the constituent documents. The participants of an LLC are not liable for its obligations and bear the risk of losses associated with the activities of the company, within the limits of the value of the contributions they made.

A joint stock company is a company whose authorized capital is divided into a certain number of shares; Participants in a joint stock company are not liable for its obligations and bear the risk of losses associated with the company’s activities, within the limits of the value of the shares they own.

Joint stock companies and limited liability companies have much in common.

However, an LLC is a simpler legal form than a CJSC. A limited liability company is the most suitable form for creating a legal entity with a small number of founders. A joint stock company requires a more complex management structure than a limited liability company, despite the fact that it is possible to register a closed joint stock company even with one founder.

Registering an LLC is cheaper (particularly because it does not involve registering the issue of shares).

The most significant features of an LLC, which distinguish it favorably from a closed joint-stock company, are: a fairly simple procedure for creating a limited liability company, which involves preparing a package of documents established by law and sending it to the tax authority.

Unlike the creation of a closed joint stock company, which also requires registration of the issue of shares, the process of creating an LLC is formally completed. All that remains is to register the new legal entity with various funds and open a current account in a suitable bank.

Another advantage of a limited liability company is the protection of the property interests of LLC participants. Each of the participants can leave the Company at any time, demanding payment of the actual value of his share or the allocation of the share in kind. But there is one important point here.

Such a free policy is not always beneficial for the interests of the Company itself in particular, and business in general, for which this may be dangerous. In addition, the Company does not always have available cash to pay for the share of the withdrawing participant, therefore, in order to satisfy the latter’s requirement, the Company has to say goodbye to part of the property necessary for the operation of the LLC. Therefore, a Limited Liability Company is traditionally considered a form of “family” business, in which only trust relationships exist between the founders, and guarantee that there may not be a division of property;

From the point of view of the possibility of doing business, obtaining licenses for a particular type of activity, certification of products, etc., the factors of LLC and CJSC are also equal.

The measure of property liability of LLC participants and participants (shareholders) of a CJSC is the same: LLC participants (CJSC shareholders) are not liable for the obligations of the company and bear the risk of losses associated with its activities, within the value of the contributions they made to the authorized capital (respectively, for a CJSC - owned by them shares).

Separately, it should be said about the possibility of a participant leaving the society. The law does not provide for a participant (shareholder) of a closed joint-stock company to leave the closed joint-stock company.

A shareholder of a closed joint stock company can terminate participation in it only by selling or otherwise assigning his shares to other shareholders, the company itself, or a third party, or after the liquidation of the company. As for LLCs, until July 1, 2009, the founder (participant) of a limited liability company had the right to leave the company at any time, regardless of the consent of other participants, and he had to be paid the value of part of the LLC’s property corresponding to his share in the authorized capital. Since July 1, 2009, the possibility of a participant leaving an LLC has become significantly more difficult - now a participant can also leave an LLC, but only by alienating (essentially, selling) his share to the company.

This tightening of legislation regarding the possibility of a participant leaving an LLC, on the one hand, makes a limited liability company more reliable and stable, insuring against an unexpected situation when an LLC participant who decides to leave it puts the enterprise on the brink of bankruptcy, since the company’s assets may not be enough to continue its business activities after payment to the withdrawing participant.

From July 1, 2009, any transactions on the alienation (sale, donation, assignment in any other way) of shares in the authorized capital of an LLC can only be concluded in notarial form.

The person alienating the share and the acquirer of the share must jointly visit a notary and certify the agreement concluded between them.

After notarization, documents confirming the change of ownership of the share are submitted to the tax authority for state registration. It is not easy to certify a transaction with a notary - for this you need to collect a solid package of documents (read more about this here)