There have been major changes in the regulations on business entities in the Russian Federation in recent years. As from September 1, 2014, all legal entities are divided into corporate and unitary entities. Joint stock companies
and limited liability companies
are the two most common types of legal corporate entities
under the Russian corporation laws. Only joint stocks company
is allowed to issues shares.
Under the current legislation, joint stock companies can be further divided into two kinds - public and non-public. (Prior to amendments in 2014, joint stock companies were divided into open and closed).
Public joint stock company
The key characteristics of a public joint stock company incorporated in Russia are as follows:
- The legal name and the charter of the company must show that it is a public entity;
- There is no limits on the number of shareholders;
- The company is allowed to distribute shares via open subscription and/or via the stock exchange;
- It may not have as its sole shareholder another business entity consisting of a single entity;
- The charter capital must be at least 1,000 times of the statutory monthly minimum wage (in current term, RUB 100,000);
- The company board of directors shall consists of at least five members;
- The functions of the Registrar and the counting commission must be done by an independent licensed organization;
- The Charter cannot make reference to the competence of the general meeting of shareholders for functions not listed by the Russian Federation Civil Code and the laws on joint stock company.
Non-public Joint Stock Company
The key characteristics of a non-public joint stock company incorporated in Russia are as follows:
- The shares and securities of the company are not publicly listed and it is not open for subscription;
- No obligation to establish a board of directors;
- The number of shares and votes that belong to one shareholder as well as the nominal value of shares can be restricted;
- The charter capital must be at least 10 times of the statutory monthly minimum wage (in current term, RUB 10,000);
- The charter of the company can make reference to the competence of the general meeting of shareholders for functions not listed by the Russian Federation Civil Code and the laws on joint stock company.
Process for opening a joint stock company in Russia
To set up a joint stock company in Russia, the following steps are required:
- Registration with the tax authorities;
- Registration with State Committee;
- Company seal creation;
- Registration with the State Statistics Committee;
- Registration with social insurance funds (Pension Fund, Social Security Fund, Obligatory Medical Security Fund);
- Registration of the shares issued by the joint stock company with the Central Bank of Russia.
The entire process of company incorporation in Russia for a joint stock company could take up to two months. In some cases, approval of the Federal Antimonopoly Service may be required depending on the size and significance of the assets or revenue of the founders. Our specialists in company formation in Russia are available to assist you through the registration procedure.
Legislation and corporate governance
The incorporation and operation of a joint stock company in Russia is governed by the Civil Code of the Russian Federation, Federal Law No. 208-FZ of December 26, 1995 (as amended) on joint stock companies and Federal Law No. 39-FZ of April 22, 1996 on the securities market, if shares are issued. Although not mandatory, joint stock companies are recommended to observe Code on Corporate Governance adopted by the Central Bank of Russia.
For more information on the setting up a joint stock company in Russia
and on the relevant legislations and corporate governance, please contact
our Russian experts
on company formation in Russia.