There have been major changes in the regulations on business entities in the Russian Federation in recent years. As from September 2014, all the 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 stock 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). Our company formation representatives in Russia
are at your service if you would like to set up a joint stock company in Russia
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 limit 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.
What are the conditions for JSCs in Russia?
There are no harsh requirements for joint stock company incorporation in Russia
, however, it is recommended to pay attention to the initial capital of RUB 100,000 for which half of it can be paid within 3 months, in the case of open ones. The same thing is available for closed joint stock companies
with the mention that such entities can be registered with a minimum share capital of RUB 10,000. As for the management board of joint stock companies in Russia
, at least 5 members are needed and at least one general meeting is necessary each year. It is important to know that a joint stock company can be represented jointly or separately by a few “one-person” executive bodies, as stipulated by the Company Act in Russia
. This kind of body is in charge of daily management operations in the firm, mentioning that reporting is needed. You can talk to our team of consultants for additional information about the general rules for opening a joint stock company in Russia
Is an auditor necessary for joint stock companies in Russia?
Yes, another important rule linked to joint stock companies in Russia refers to the internal auditor which is mandatory for such kind of entities, mentioning that the shareholders of the company must appoint him/her. In the case the owners do not want an internal auditor, the Internal Auditing Commission can provide auditing services for the established joint stock company in Russia. Complete information about audits in Russia can be provided by our local team of accountants.
Is JSC easy to register in Russia?
Yes, the same conditions for registering a limited liability company
apply to joint stock companies in Russia
, with the mention that the issuance of company stocks is made in agreement with the Central Bank of Russia. Feel free to talk to our company formation representatives in Russia
and find out more about the applicable legislation and the requirements in this sense.
JSC liquidation in Russia
In case an entrepreneur wants to close a joint stock company in Russia, this can be made in respect with the Commercial Code, if a court of law issues a decision in this sense. There is also the possibility of voluntarily company liquidation, meaning that the owners must agree in this sense, under specific conditions. There are no complex formalities in closing a joint stock company, if all the conditions are respected and if you decide for support from our team of consultants in Russia.
What are the advantages of joint stock companies in Russia?
There are many reasons to believe that a joint stock company can be de ideal business entity for a foreigner in Russia. Here are a few examples:
- • The long-term existence is connected to joint stock companies in Russia.
- • The members forming the joint stock company in Russia are not liable for any company debts or losses.
- • Because of the issued stocks, JSCs in Russia have complete access to large capital contributed to the company.
- • The directors of joint stock companies in Russia are selected by the owners.
- • Fiscal funds and liquidities can be used by joint stock companies in Russia.
FAQ about joint stock companies in Russia
1. Is there a limit in case of the number of shareholders of JSCs in Russia?
No, there is no limitation referring to the number of stockholders of a joint stock company in Russia.
2. Can a joint stock company in Russia be listed on the stock exchange?
Yes, joint stock companies in Russia can be listed on the stock exchange in Russia or outside the country. Specific rules are imposed, but you can solicit assistance from our consultants.
3. What is the capital for joint stock companies in Russia?
RUB 10,000 are necessary for opening closed JSCs and RUB 100, 000 for an open joint stock company in Russia. Feel free to ask any questions about how to open a joint stock company in Russia.
4. Is the general meeting necessary for JSCs established in Russia?
Yes, it is a mandatory condition to have a general meeting as owners of joint stock companies in Russia
. This needs to take place once in the year, whether in Russia
or in another country.
5. Who can form joint stock companies in Russia?
Any domestic or foreign investor looking for business in Russia at a large scale can decide on registering a joint stock company, respecting the applicable legislation in this country. Although it is not a complex registration procedure, it is recommended to ask for the support of our team of company formation specialists in Russia and let us handle the entire 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.