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  • Joint Stock Companies
    Joint Stock Companies are the companies the authorized capital of which is divided into a
    definite number of shares and along with this members don’t bear any liabilities and risk of loss
    connected with the business activity of the company within the value of their shares.
    Open Joint Stock Companies are the company the members of which can alienate their shares
    without the consent of other shareholders. Closed Joint Stock Companies don’t have such an
    opportunity and shares are allocated among its founders or other scope of persons known in
    advance.
    Centuries-old history of development of this institute formulated two main ways of safeguards
    for the rights of JSC’s partners for secure conduct of business: property guarantees and
    permanent control of JSC administration’s activity which is found on the proper procedure
    system and information transparency.
    The security instrument of property guarantees in relationship with JSC is the authorized capital.
    It consists of share denominations bought by members and defines the minimum value of JSC
    property which guarantees its creditors’ interests. If the values of JSC net assets turns out to be
    less than the authorized capital on termination of any financial year starting from the second one,
    the authorized capital is to be reduced by the appropriate volume. Herewith if the mentioned
    value becomes less than the permissible one of the authorized capital, the company is to be
    dissolved.
    Deposits to the property of a Joint Stock Company can be money, security papers, other
    properties and property rights or other monetizable rights. Herewith in cases as provided for by
    the law the estimation of members’ deposits is subject to independent expert inspection. Such
    regulation approaches the Russian legislation to the rules established in other countries for
    rooting out ill practices while formation of authorized capital.
    Minimum authorized capital of a Joint Stock Company is 1000-tuple value of minimum monthly
    rate of labour payment (as on the date of issuing the constitutional documents for registration).
    Joint Stock Companies can issue only inscribed shares.
    The board of director in the management system has the only aim: to protect the interest of
    company members under conditions of management function isolation. Exactly the isolation of
    several members as managers or the presence of hired managers can cause the contradiction in
    business activity of the company with the ideas on this issue of other member which don’t
    exercise managing functions. The General Meeting is the ideal instrument thereof however the
    more members there are, the harder to gather them together. This contradiction can be solved by
    establishing a special body which consists of shareholders (or their representatives) and is
    conferred all powers not included to the jurisdiction of the board by the decision of the General
    Meeting which can’t realize it itself. Such body established in format of the board of directors or
    supervisory board must be a structural part of any company with a quite big number of members
    regardless of its type.
    In accordance with the Civil Code of the Russian Federation, the board of directors (the
    supervisory board) is established in a Joint Stock Company the number of members of which
    exceeds 50; it means that a JSC with less number of members establishes this body at
    shareholders’ discretion. Being the highest body of the company between the general meetingsof shareholders, the board of directors has both control and regulatory functions. Its jurisdiction
    covers solving all the issues concerning the business activity of JSC, except the ones which are
    under the exclusive jurisdiction of the General Meeting.
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