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What is a PJSC and PrJSC?

What is a PJSC and PrJSC?

Law firm AGTL specializiruetsya on working with the securities market and has an extensive practice in the creation and support of activity of joint-stock companies.

Our advantages

experts in the field of company law, advise on questions of activity of joint-stock companies, develop internal documents and shareholder agreements;

a full range of services to create AO: preparation of documents, registration of JSC, registration of shares issue, registration of prospectus of issue of shares;

legal support at all stages of the work: assistance in registration of the additional issue of shares in the organization share repurchase.

The legal status of joint stock companies

Today joint stock company (JSC) is one of the most common forms of doing big business. Economic activity in the form of a JSC allows to attract to create AO and its subsequent activities unlimited financial resources in the form of capital contributions as founders and outsiders.

Joint-stock company – a business company the Charter capital of which is divided into a number of shares of equal nominal value the corporate rights under which shall be certified by shares.

Joint-stock company may be incorporated through establishment, merger, division, allotment or transformation of business (entrepreneurial) companies, state (state), and communal (utilities) and other companies.

The founders of joint stock companies can be governments as well as individuals and/or entities that made the decision on the basis thereof.

The founders of joint stock companies can be one, two or more entities.

Joint-stock company may be created by one person or may consist of one person in case of acquisition by one shareholder of all shares.

Joint-stock company cannot have as a sole participant another business society member who is one person. Joint-stock company can not be composed only of shareholders-legal entities, the only participant of which is one and the same person.

The minimum share capital joint stock company is 1250 minimum wages based on minimum wage rate that is valid at the moment of creation (registration) of the joint stock companies. Payment for the shares placed during the Foundation of the AO may be cash or property, property and non-property rights which have a rating, securities (except for debt securities, the Issuer of which is the founder and promissory notes). Every founder of a JSC must pay the full cost of the acquired shares until the date of approval of results of floatation of the first issue of shares.

Joint-stock company is not responsible for obligations of its shareholders. The society and its authorities may not apply any sanctions that restrict their rights in the event of the shareholders of illegal actions, and the shareholders are not liable for the obligations of society and bear risk of losses connected with activities of society, only within their appropriate shares.

The shareholders who not completely have paid the shares, in cases stipulated by the company Charter, are responsible for the company's obligations within the unpaid part of the cost of their appropriate shares.

Joint-stock company is established and acquires legal personality from the date of its state registration in the manner prescribed by law.

The founding document of a joint stock company is the Charter. The Charter of the JSC, in addition to General information for all types of business entities, should contain information about the types of shares that are placed in their nominal value, the ratio of different types of shares, number of shares, which are bought by founders, the consequences of default on the redemption of shares, period and order of payment of dividends.

The founders may be the constituent agreement which specifies the procedures for joint activities regarding the establishment of joint-stock companies.

To protect the rights of existing shareholders provided that in case of additional issue of shares the existing shareholders have an overwhelming right to purchase them.

The company's Charter may envisage the possibility of concluding an agreement between the shareholders, under which shareholders rely on additional responsibilities, including the obligation to participate in General shareholders meetings, and imposes liability for non-compliance.

In addition, a body that protects the rights of shareholders, – the Supervisory Board. In joint-stock companies with number of shareholders – owners of ordinary shares of 10 persons and more the creation of a Supervisory Board is mandatory.

To manage current activity of the company is the Executive body, which may be collegial (Board, Directorate) and individual (Director, General Director).

To check financial and economic activities of joint-stock companies the General meeting elect the audit Commission (auditor).

If at the end of the second and each following financial year the net asset value of joint stock companies is less than the Charter capital, the company shall declare about reduction of the size of the share capital and register the appropriate changes to the Charter in the prescribed manner. If the value of the net assets becomes less than the minimum share capital prescribed by law, the company is subject to liquidation.

Joint-stock company terminates activities as a result of the transfer of all their property, rights and responsibilities to other entrepreneurial society–successor (by merger, accession, division, transformation) or liquidation.


Joint-stock companies according to the type are divided into:

- public joint-stock companies (PJSC);

- private joint stock companies (PRJSC).

Private joint stock company (PJSC) is a joint-stock company, the number of shareholders which cannot exceed 100 shareholders.

Public joint stock company (PJSC) is a joint-stock company, the number of shareholders in which, therefore, can exceed 100 persons.


The advantages of doing business through the establishment of joint-stock companies:

joint stock company - is a convenient way of investments ' attraction;

- income opportunity in the form of dividends;

- shares give the right to participate in the distribution of assets of JSC in case of its dissolution;

- the ability of owners of ordinary shares to participate in the management of JSC;

- stocks, like other assets, can be provided as collateral, be used in other operations of their owners;

shareholders are not liable for the obligations of joint-stock company and bear risks of losses connected with the activity of the companies within the value properly their shares;

- the amount of the liability of the company for its own obligations is limited to only proper it property;

- with the success of the JSC the market value of its shares may significantly exceed nominal.


The disadvantages of doing business through the establishment of joint-stock companies:

- if the value of the net assets becomes less than the minimum amount of its Charter capital, the company is subject to liquidation. The mechanism of the elimination of the AO in reducing the value of its net assets at the legislative level is not resolved;

- issue of shares and turnover of shares require compliance with additional requirements of the legislation on securities and stock market;

public joint - stock company is obliged to pass the listing procedure and remain in the stock register, at least one stock exchange;

AO are required to report to state authorities that govern the circulation of securities and stock market;

- to ensure the turnover of shares and registration of holders of ordinary shares necessary to establish relations with professional stock market participants: registrars, traders, custodians, Depository, etc.;

- relatively large costs of creating;

- double taxation: the first time the taxes are paid before the proceeds are distributed to shareholders, second time paid by the shareholders with the dividends received.