How this happens, as well as why it is needed, should be considered in more detail. What is a joint stock company? To understand the difference between a JSC and an OJSC, it is necessary to consider this form of economic activity in a general sense. Such an organization is formed by several founders. The authorized capital is formed from a certain number of shares, which are distributed among the owners. They are issued when a company is created. Moreover, the number of securities and their nominal value are immediately specified. The rules for their distribution indicate the type of organization of the enterprise. These securities share certain rights with their owners. For the fact that the shareholder contributed a certain amount of his funds to the authorized capital (this is fixed by the share) at the end of the reporting period to receive the corresponding part of the net profit. This remuneration corresponds to the share of the securities owner in the total authorized capital.
What is the difference between pao and ao?
Attention
Reorganization For certain reasons, it may be necessary to reorganize an OJSC into a JSC. This conversion can also be performed in the opposite direction.
In this case, the volume of the authorized capital changes, as well as the rights and obligations of the owners of securities. If, based on the results of the company’s activities, its authorized capital does not exceed 1000 minimum wages, documents for reorganization should be prepared.
This provides a number of benefits to the enterprise. But the reduction of own sources leads to a decrease in production. This is a negative trend, but with a significant drop in sales volume and the market value of the company's shares, this is a necessary measure to prevent bankruptcy.
The reorganization process is taken very seriously. The decision to change the form of business is made at a meeting of shareholders based on the results of the financial statements.
The difference between ao and pao
From September 1, 2014, there is no need to make changes to the number of shareholders of a JSC that has become a PJSC/JSC. Number of shareholders in a PJSC (formerly OJSC) The number of shareholders of a public (formerly open) company is not limited.
Info
Shares of JSC (formerly CJSC) Shares of JSC (formerly CJSC) cannot be traded on stock exchanges. Shares of PJSC (formerly OJSC) Shares of PJSC (formerly OJSC) can be traded on stock exchanges.
Federal Law 05/05/2014 N 99-FZ, which came into force on 09/01/2014, was adopted with the aim of strengthening control over the sale of large blocks of shares in the former OJSC and is intended to coordinate the legislation in force in this area. In particular, a system of state control over the JSC takeover procedure has been created.
Interested parties are required to notify the authorized body of their intentions in advance, which is obliged to give antimonopoly approval or prohibit the transaction.
Pao or ao?
Important
If the owner of the securities is a legal entity, a copy of its registration documentation will be required. Next, data on the receipt of funds or property of shareholders is prepared.
After this, the type of activity of the company is determined. It is assigned the appropriate OKVED codes. In order to assign a legal address to an organization, it is necessary to provide a lease agreement. If it is not there, representatives of the commission go to the location of the main production facilities of the enterprise. It is assigned a legal address. What does the reorganization give? Changing an OJSC to a JSC entails significant changes for the organization.
First of all, the balance sheet currency is significantly reduced. With a decrease in own financial sources, the investment rating falls.
Society will be able to attract fewer credit funds.
Comparison of pao and ao
There is no limited period for making appropriate adjustments to the charter of the enterprise and the Unified State Register of Legal Entities. In accordance with Part 10 of Art. 3 Federal Law 99 there is no need to carry out reorganization, liquidation, re-registration of companies, unless there is an urgent need for this. When determining the legal status of a joint-stock company, the rights and obligations of shareholders, determining the procedure for the creation, reorganization and liquidation of companies, it is necessary to be guided by the provisions of Federal Law 208 of December 26, 1995 “On Joint-Stock Companies”. In fact, public and non-public companies differ only in the choice of method of subscription to shares - open or closed.
- A closed subscription allows only the founders or members of a narrow, predetermined circle of people to buy shares.
Differences between a public JSC and a non-public JSC
And the results of the activities themselves are not subject to publication; The features of PJSC include:
- As for the authorized capital for a public joint stock company, there is a rule: it is not formed immediately when the organization is created, but accumulates gradually as it issues blocks of shares. Due to this, the amount of capital of the company can reach impressive sizes and amount to hundreds of thousands of rubles;
- The company's shares are freely placed on stock markets and can be sold and bought in any quantity, while the number of company shareholders can be unlimited. The number of shareholders will depend only on the volume of issued securities;
- The formation of the authorized capital of a PJSC is not required when organizing this form of ownership.
What is pao instead of oao? What is the difference and why is it renamed?
NAO: the registry holder can also confirm the information, but his duties can be delegated to a notary.
- Who usually gives consent to the alienation of a block of shares? PAO: no one’s consent is needed, and it is also impossible to establish a rule requiring it to be obtained. NAO: No one's consent is required. But sometimes, the charter contains information about obtaining the consent of certain shareholders or the company to alienate shares.
- Who has the right to purchase shares? PJSC: shareholders cannot receive any preference for purchasing shares.
But there are exceptions - this right applies to additionally issued shares, as well as securities convertible into shares. NJSC: provides in advance in its charter the rights of shareholders, incl. for the purchase of shares if they are sold by other shareholders.
How is ao different from oao? reorganization of JSC into JSC
Funds may be credited to the company's account during the turnover of shares;
- A public joint stock company is required to submit an annual report on the results of its activities. Comparative table of PJSC and LLC Main differences of LLC PJSC Number of founders Not less than 1, but not more than 50 Any Amount of authorized capital Not less than 10,000 rubles Not less than 100,000 rubles The composition of participants Can only be changed with the mandatory participation of a notary, who certifies the fact of alienation of the participants. The data is entered into the Unified State Register of Legal Entities. This procedure is expensive. Shareholders can freely sell their shares. At the same time, information about such transactions is not subject to notarization and is entered only in the register of shareholders of the company Information about the composition of the meeting participants Confirmed by the participants unanimously Confirmed by a special registrar body.
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 under the conditions 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
The 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?
The bank has changed its legal form 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 by 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.
Structure of a Public Joint Stock Company 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 there is a lack of company property, the shareholders who influence the management of the bank are responsible for the 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?
Changing the abbreviation indicates greater responsibility to citizens 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 change of name, the financial organization completed the following mandatory actions:
- The seal has been changed.
- The name on the website, on signs, and in the mailbox has been changed.
- All clients were warned about the new form of ownership and the need to enter the correct details when filling out documents.
- If necessary or at the request of counterparties, accounts, contracts, agreements are reissued.
The main differences between a Public Joint Stock Company and an Open Joint Stock Company 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.
Greetings, dear readers. When opening an individual entrepreneur, everything is simple, you just need to choose the right types of activities and choose the optimal form of taxation. In the case of an LLC, everything is more complicated, and in the case where 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!
Page navigation
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 they differ - 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 the individual entrepreneur will have to pay for debts that were incurred while running a business, 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.
| Basic signs | OOO | Company | OJSC |
|---|---|---|---|
| Constituent documents | Charter | ||
| Registration | Federal Tax Service (entry in the Unified State Register of Legal Entities) | Inspectorate of the Federal Tax Service (entry in the Unified State Register of Legal Entities) Registration of the issue of shares in the Federal Financial Markets Service | |
| Authorized capital | Shares | Shares (uncertificated securities | |
| Shareholders/Participants | Not > 50 persons | Any quantity | |
| Sale/purchase of shares (shares) | In accordance with the minutes of the general meeting | Closed subscription | Both closed and open subscription |
| Lineup changes | it is not necessary to make changes to the Charter | it is not necessary to make changes to the Charter, unless there is more than one shareholder | |
| Composition of governing bodies | General meeting; Board of Directors (optional). General Director and/or Management Board (Directorate) | General meeting. Board of Directors – optional. In the event that the number of shareholders is > 50 - mandatory. General Director and / or Management Board (Directorate) | |
| Conversion | Reorganization into an ALC, CJSC or OJSC. In this case, it is necessary to notify creditors, as they may make demands for fulfillment of obligations ahead of schedule. | Reorganization into an LLC or ODO. Mandatory notification of creditors. The transformation of a CJSC into an OJSC and vice versa is not a reorganization, so notification of creditors is not required. | |
| Publicity | Publication of information is not required, except in cases of bond issue | Mandatory public reporting | No publication required |
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.
From the site: http://sooo.ru/otkrytie-zakrytie-ooo/pered-otkrytiem/osnovnye-otlichiya-ooo-zao-i-oao.html
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 business 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 can include no more than 50 people, and participants have the right to engage in various types of 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 an LLC has a general meeting and a general director, while a CJSC has a board of directors.
conclusions
- 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.
- Increase the 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.
- 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.
- Managment 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 an LLC and a CJSC is the division of the authorized capital into shares of participants in a limited liability company and into 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 either type, its founders draw up an agreement on the creation of a new commercial structure, which does not have the legal force of 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 circulated in the public domain, i.e.
From September 1, 2014 of the 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?
- By and large, the rules that previously applied to OJSC apply to PJSC. NAO is basically a former closed joint stock company.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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, 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 regarding 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:
- At a specially convened extraordinary meeting of shareholders.
- 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.
- At a 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. The legalization of agreements between shareholders (corporate agreement in accordance with Article 67.2 of the Civil Code of the Russian Federation) can be considered a step forward.
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
| Limited Liability Company | Category | Joint-Stock Company |
| A limited liability company (the generally accepted abbreviation LLC) is a business company created by one or several persons, the authorized capital of which is divided into shares; members of the Company are not liable for its obligations and bear the risk of losses associated with the activities of the Company, within the value of their shares in the authorized capital of the Company. | Concept | A joint stock company (hereinafter referred to as JSC) is a commercial organization whose authorized capital is divided into a certain number of shares certifying the obligatory rights of the Company's participants (shareholders) in relation to the Company. |
| To establish an LLC, it is sufficient to follow the procedures for the founders to make decisions on the issues of establishing an LLC (making a decision, signing the Foundation Agreement, approving the Charter, forming management bodies, etc.) and then going through the procedures for creating an LLC with the registration authority. | Establishment of a legal entity | When creating a JSC, after registration procedures (similar to the establishment of an LLC), it is necessary to go through an additional stage - the initial placement of shares (issue). |
|
Controls |
|
| Founders/participants may provide in the LLC Charter the possibility of making property contributions without changing the size of the charter capital and the shares of participants. The charter of the LLC may provide that such property contributions may be made disproportionate to the size of the shares of the participants. | Procedure for financing activities | It is impossible to make property contributions to a joint-stock company without increasing the authorized capital (with additional issue procedures). |
| In relation to LLCs, the general requirements for legal entities to comply with the legislation of the Russian Federation apply. | State control | The activities of the JSC are controlled by the Federal Financial Markets Service, including:
|
| In an LLC, the procedure for increasing the capital includes the need to make a decision, make appropriate contributions and register changes to the Charter with the registration authority. | Increase the authorized capital | The procedure for increasing the capital, in addition to registering changes to the Charter, requires compliance with the procedures for additional issue of shares, which can take a total of more than six months. |
|
Reserve and other funds |
|
The sale of participants' shares requires mandatory notarization and subsequent notification of the registration authority about changes that have occurred in the composition of the LLC participants. It should also be noted that:
|
Sale of shares/shares | The sale of shares is carried out only through the register of shareholders, which can be maintained either by the JSC itself or by a specialized participant in the securities market.
|
| The law allows the founders to provide in the Charter the right to leave the LLC at any time with receipt of the actual value of the share in the manner established by the Charter. | Withdrawal from the membership of a legal entity | The law does not allow a shareholder to terminate participation in a joint-stock company at any time without the procedure of selling his shares. |
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 activities of the company, 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)