Читать книгу Russian business law: the essentials - - Страница 36

4.1.2.3.1. The Legal Nature of a JSC

The JSC is one of the most common organizational-legal forms of legal entities in Russia. Its charter capital[37] is divided into shares belonging to the JSC’s participants. The company is not liable for the shareholder’s obligations. The shareholders are usually not liable for the company’s obligations either, except in a situation when they have not fully paid for their shares.

Public JSC, as well as a non-public JSC with more than 50 shareholders, are obliged to disclose information in accordance with the Federal Law on Joint Stock Companies.

4.1.2.3.2. The Features of the Establishment of a JSC

In accordance with the Clause 1 of Article 98 of the CC of the RF, founders of a JSC are obliged to execute a contract among themselves upon the founding a JSC, which shall define some aspects of the company’s creation. Such a contract must be concluded in writing.

This contract is not a constituent document of the JSC.

4.1.2.3.3. The Shareholders

Both individuals and legal entities may be JSC participants. The JSC may have a single shareholder (another company having a single participant cannot appear as such a shareholder, in accordance with Clause 6 of Article 98 of the CC of the RF).

4.1.2.3.4. The Shares

A public company has the right to allocate shares, and issue securities which are convertible to shares, through open subscription. A non-public company does not have the right to offer (to an unlimited group of persons) such securities for acquisition.

A non-public company may provide for in its charter the pre-emptive rights of the shareholders to the acquisition of shares being alienated by another shareholder (on paid transactions). Additionally, the charter may include a requirement to obtain the consent of stockholders for the alienation of the shares.

The JSC has the right to allocate several types of shares, as well as special types such as preferred shares. The JSC charter specifies the dividend amount and/or the cost paid, in the event of a company’s liquidation of preferred shares. The preferred shares do not grant the right to vote at the general shareholders’ meeting. An exception to this rule is for meetings when certain issues are being considered, such as making amendments and additions to the company's charter, limiting the rights of the preferred share owners, as well as other issues.

4.1.2.3.5. The Payment of Dividends

The general shareholders’ meeting may decide to pay dividends to the shareholders on a quarterly, biannually, or annual basis.

4.1.2.3.6. The Increase and the Reduction of JSC Charter Capital

The increase of charter capital may be implemented:

i) by increasing the share’s par value, or

ii) by issuing additional shares.

A reduction of the charter capital is implemented by:

i) the reduction of the share’s par value, or

ii) the acquisition of a part of the shares, with the purpose of reducing their total number.

4.1.2.3.7. JSC Management Bodies

JSC management bodies are:

i) The General Shareholders’ Meeting

The general shareholders’ meeting is the highest management body of a JSC. All shareholders have the right to participate in it. The most important issues of the JSC’s activities are addressed by the general shareholders’ meeting.

ii) Board of Directors (supervisory board).

Forming a board of directors is not obligatory for a JSC, which has less than 50 shareholders with voting shares. The general shareholders’ meeting elects the members of the board of directors (supervisory board) by a cumulative vote. The responsibilities of a company’s board of directors (supervisory board) includes the resolution of issues of the general management of company’s activities, except for the issues that federal law assigns to the responsibility of the general meeting of shareholders.

iii) A Sole Executive Body

The sole executive body manages the company’s current activities. The general shareholders’ meeting or the board of directors (supervisory board) elect the sole executive body, which is accountable to them.

iv) Executive Board

The forming of a executive board is not obligatory for a JSC. If a executive board has been formed, it shall manage the current activities of the JSC together with the sole executive body. The general shareholders’ meeting or the board of directors (supervisory board) elect the executive board, which is accountable to them.

v) An Audit Committee

The general meeting of shareholders elects an audit committee. It controls the company’s financial-economic activities.

37

See chapter 4.1.2.1.C for the minimum amount of JSC charter capital.