Investments serve as the engine for the development of any business. One of the ways to raise funds is to place securities.
Legal regulation of PJSC activities pursues the goals of achieving maximum attractiveness of financial markets.
What is a public joint stock company?
The legislation does not contain a comprehensive concept of a public joint stock company. However, the signs provided for in Art. 96 Civil Code and Art. 7 of the Law “On JSC” will serve as the basis for its determination.
Features of PJSC
A public joint stock company has all the features inherent in a joint stock company, regardless of its type.
These include the following characteristics:
- Authorized capital divided into shares, confirming their liability rights. The establishment of such a legal entity does not imply other methods (shares or shares).
- Participants respond with the value of their shares. The status of a shareholder implies liability only for the unpaid portion of the shares.
This type of joint stock company is characterized by its own characteristics:
- The corporate name of a public joint stock company must indicate its public status. In practice, this requires the presence of the word “public” before the words “joint stock company”. Legal regulation requires this to protect the interests of investors. It's important that they understand current rules, as well as the minimum and maximum risk before making your investments.
- They may place shares and other securities convertible into shares through public subscription, in accordance with the rules provided for legal regulation financial markets.
Based on the characteristics, we can obtain the following definition. A public joint stock company should be understood as a legal entity whose authorized capital is divided into shares owned by shareholders who are liable for obligations within the value of their contribution to the authorized capital.
Its shares are distributed through open subscription, and the company name contains an indication of its public status.
PJSC is not an independent organizational form, but a separate OKOPF code is provided for it. This indicates that it stands out from other joint stock companies.
What are the positive aspects of PJSC?
Only a small number of large companies in modern world do not have public status.
This proliferation explains the main advantages associated with the ease of attracting financial resources on stock exchanges and other platforms.
Other advantages include banks being more willing to lend to these businesses. They often accept PJSC shares as collateral.
The disadvantages of this form appear in cases of small enterprises. Strict legal regulation and frequently submitted reports require the expenditure of significant financial resources, which are small and medium business may not always possess.
Methods of formation of PJSC
There are 3 ways to form a public joint-stock company:
- Creation. In this case, the establishment occurs new organization without succession.
- Reorganization in any form. It involves the implementation of procedures provided for by law, the result of which is the commencement of the activities of a PJSC, which is the legal successor of the original legal entities.
- Situations when a non-public JSC acquires public status. This decision provides for a minimum threshold of 75% of shares of each type (it can be set higher by the charter). You will also need to fulfill other requirements for PJSC.
Requirements applicable to PJSC
The actual ability to attract unlimited financial resources stipulates special legal regulation. Special Requirements accompany both the creation and activities carried out by a public joint stock company.
Creation requirements
A PJSC is created based on the decision of future shareholders. In addition to data typical for other societies, it must decide on the appointment of a registrar.
Only a professional participant in the securities market has the right to carry out such activities. This is due to the fact that it is necessary to ensure maximum transparency in maintaining the register.
The agreement on the creation of a PJSC, which is concluded by the participants, determines the authorized capital, categories of shares to be placed and the procedure for their payment. This document is valid until the end of the period established for payment of shares.
The minimum authorized capital of such a JSC is 100 thousand rubles.
Special requirements for the charter
In addition to other requirements relating to a joint stock company, the charter of a PJSC must contain the following data:
- Full as well as abbreviated corporate name of the organization, indicating its publicity status.
- Mandatory presence of a board of directors, the procedure for its activities and powers. This is due to the fact that the company has a significant number of shareholders, whose rights may be significantly affected without the presence of an intermediate link between them and the executive body. The Board of Directors is a permanent body, which includes only individuals. The minimum composition of this body may include 5 members. If the number of voting shareholders is over 1 thousand, then the minimum size of the board of directors is 7 people, and if the number of such shareholders is over 10 thousand - 9.
- Lack of opportunity for the general meeting of shareholders to expand its competence. This is due to the fact that management large companies is complex, and many ordinary shareholders may not have the relevant competence. Therefore, management functions are carried out indirectly, through the board of directors and the governing body, acting under the control of an intermediate structure. The effectiveness of the latter is revealed by the reporting of PJSC.
The provisions of the charter relating to the limit of shares that can be owned by one person, as well as restrictions on their sale, are considered invalid.
If we're talking about on the transfer of a non-public JSC to a public one, then the provisions of the charter must be adapted to the new requirements.
However, the greatest difficulties are not associated with correctly filling out all the fields of the registration application and putting required code relevant inspection. Large expenses will require a significant amount of information that will have to be processed during the work of the PJSC.
Requirements for PJSC in the course of its activities
The documents of a public joint-stock company are carefully checked not only during the state registration process, but also throughout its entire activity. At the same time, a mandatory procedure for publishing certain materials is established.
The annual reports of a PJSC, including accounting and financial statements, as well as data on securities, are subject to disclosure. The Law “On the Securities Market” (Article 34) specifies these provisions and requires the disclosure of quarterly reports.
Based on these provisions, consolidated accounting documents for every 3 months are subject to publication.
A message about the place and time of the general meeting of shareholders, boards of directors and their decisions should be publicly available.
In addition, we are talking about the formation and termination of powers executive bodies, approval major transactions, approval by the issuer of internal regulations, placement and repurchase of securities, as well as the recommended amount of dividends and the procedure for their payment. This list includes more than 50 items, which are united by the fact that they reflect data on the financial well-being of the PJSC.
Compliance with these requirements should indicate the openness of the company, making it more attractive to investors.
An organization may be exempt from publishing a number of information provided it submits a reasoned application. Requirements for this include ceasing publicity status.
In 2014, serious improvements were introduced regarding the activities of enterprises. Very often the question began to be heard in the media: “What is a PJSC instead of an OJSC?” In this article we will try to answer it, as well as consider the related innovations.
Changes since September 2014
Since September 2014, amendments to the Civil Code of the Russian Federation have been adopted. They introduced innovations in the names, as well as some adjustments to the functioning various forms property. The question most often asked in business is: “What is a PJSC instead of an OJSC?”
The introduction of these changes is associated with the abolition of OJSC and CJSC, namely, a change in their names, that is, the concept of closed and open joint-stock companies has been abolished.
Instead, there will now be public and non-public societies. In essence, these will be the same associations of shareholders, but some aspects in their work will still change. So, according to the Civil Code of the Russian Federation, they will operate on the territory of the Russian Federation following organizations:
Public.
Non-public.
Non-public companies, in turn, will be divided into:
Joint-stock companies (abbreviated name AT).
Limited liability companies (short name LLC).
That is, the essence of the enterprise will remain the same, but the name will need to be changed.
The essence of the changes
Let's try to answer the question: "What is a PJSC instead of an OJSC?"
After the renaming, the activities of joint stock companies should become more open. In essence, it turns out that public societies will have to live up to their name. 
Previously, for the normal functioning of an OJSC or CJSC, it was enough for a company to place its shares and bonds on stock exchanges and make them available to everyone. This was usually done by legal departments or even hired firms.
But now the register of shares will have to be maintained by a special registrar.
Moreover, all meetings held by the enterprise should become more public. Mandatory notarization of all decisions made is also established. Certification of documents by a registrar is also allowed.
Significant changes are also noticeable in the need for annual audits. Previously, it was established only for JSCs, but now all joint-stock companies without exception are subject to mandatory annual audits.
What is an OJSC?
An open joint-stock company, or as they used to say, an open joint-stock company, is an enterprise whose fixed capital was formed through the issue of corresponding shares and bonds. Before January 1, 1995, such enterprises were called “open joint stock companies.” 
At the legislative level, the publicity of such a society was already determined, that is, all information about it should have been available to all segments of the population.
In fact, an OJSC is a company that has many owners, in other words, shareholders or owners (holders) of shares. An example is Sberbank OJSC (now Sberbank PJSC).
To manage this company, a director or even several directors were hired, who, in turn, formed a board of directors.
The OJSC, along with other enterprises, had the right to engage in all types of activities not prohibited on the territory of the Russian Federation.
PJSC (the decoding sounds like a public joint stock company) is a company whose shares must be publicly placed on the securities market.
In turn, this change (renaming OJSC to PJSC) imposed a number of obligations on the company. A public joint stock company in the Unified State Register of Legal Entities must contain information that it is public.
From now on, open joint-stock companies have the right to exist, but they must amend their charter, submit minutes of the meeting of shareholders, as well as statements in the approved form to the registration authority.
After such changes are made, the activities of the former JSC will be slightly adjusted, as they will become public.
The corresponding changes have already been made to their statutory documents such enterprises as Sberbank PJSC, Gazprom PJSC, VTB PJSC. 
The clients of these organizations have no significant reasons for concern, because in essence, these are the same enterprises, with the same activities, only they have changed their name, in accordance with the norms of the current Civil Code of the Russian Federation.
Differences between PJSC and OJSC
The main differences between a PJSC and an OJSC are defined as follows:
1. Shareholders can be both ordinary citizens and enterprises of any form of ownership.
2. The number of shareholders is not limited.
3. Shares may be transferred to third parties without the consent of other shareholders. Right of first refusal is not permitted.
4. Reporting must be published.
5. Decisions made in PJSC must be in accordance with mandatory certified by notaries or registrars.
6. Annual audit. This rule is established for all joint stock companies without exception. 
The main difference between OJSC and PJSC is their name. Existing JSCs must undergo a re-registration procedure, although no clear time frame has been established for this.
If enterprises, for one reason or another, do not make the appropriate changes to their charter, from September 1, 2014, the provisions of the current Civil Code of the Russian Federation, regulating the activities of PJSC (interpretation - public joint-stock company), apply to them. 
How to make changes?
In order to pass state registration, in accordance with the changes that have come into effect, the tax authority must provide:
1. Application in form P 13001.
2. Minutes of the general meeting of shareholders.
3. Charter in new edition in the amount of two pieces.
There is no need to pay state fee. After the documents are submitted to the registration authority, after 5 working days it makes a decision on registration or sends a reasoned refusal. Such documents can be submitted either by the head of the enterprise or by a person with a power of attorney.
After the corresponding changes are registered, the renamed OJSC to PJSC will need to perform the following operations:
1. Change the corresponding name in all seals and stamps of the enterprise.
2. Notify all banking institutions about the change and re-register accounts.
3. Notify all your counterparties about the changes that have occurred.
4. Change your name in all publicly available sources.
Additional innovations
1. An enterprise may have two or more directors. They can work both jointly and separately, but the powers of each of them must be specified in the company’s charter. But Chief Accountant however, there is still only one left.
2. The innovation affected the contribution to authorized capital. Now the involvement of an independent appraiser is required. This is mandatory for joint stock companies.
Answering the question: “What is a PJSC instead of an OJSC?”, we can say that this is practically the same enterprise, only renamed. OJSC is an open joint-stock company, PJSC is a public joint-stock company. The main activities carried out by the OJSC remained the same, however, significant changes were made in some areas that were mandatory.
At the moment, the economy has a lot organizational forms for carrying out business activities. Very often there are two abbreviations OJSC and PJSC. Many people believe that these are the same thing. However, there are some differences that help to understand how a PJSC differs from an OJSC. Let's try to understand these definitions.
What is OJSC
An open joint stock company is an organizational form that generates capital by issuing shares. It is a security that allows you to determine the contribution of each participant in the creation of the company, as well as the share of the profit received. It's called dividend. Shares are issued for free sale on the securities market. They, in turn, also determine income and losses. What else are shares needed for?
- allow you to obtain the necessary funds for organizing and running the company’s activities;
- determine the contribution of all shareholders and the percentage of profit corresponding to the contribution;
- identify risks. In the event of a collapse, each shareholder loses only a share;
- shares provide voting rights at shareholder meetings.
Shareholders can freely dispose of these shares, for example, donate, sell, etc. Shares can be sold to third parties. All information about the activities of such enterprises should be known to a wide circle of the population. OJSC differs in that before registering the company, you do not have to contribute the entire authorized capital.
The founding capital cannot be less than a thousand minimum wages; the number of shareholders is not limited to a certain figure.
An OJSC can carry out activities not prohibited by law in various areas. Typically, a shareholders meeting is held once a year. To manage its activities, the company hires a director or several directors. They create a so-called collegial body.
The concept of a closed joint stock company
A closed joint stock company is one of the most common forms of business. Typically, this form is chosen when the participants are related by family ties.
The founding capital of such organizations should not be less than one hundred minimum wages, and the number of participants should not be more than 50. The state is not required to exercise unnecessary control over the activities of such a company. CJSC has its own characteristics:
- shares belong to the founders;
- no one has the right to transfer shares to third parties;
- CJSCs may not publish annual reports;
- All activities are carried out in a mode closed to the public.
Having examined the two most popular forms of entrepreneurial activity, we can directly move on to the concept of PJSC.
Since September 1, 2014, a law has been in force in Russia that has made certain changes to the Civil Code. He touched upon the content and name of organizational forms and forms of ownership. Now the name PJSC (public joint stock company) has been assigned to the OJSC. OJSCs will still exist for some time, then they are required to re-register as PJSC. ZAO therefore means Non-Public Joint Stock Company.
Despite the name change, public joint-stock companies also underwent some changes. You should not think that OJSC and PJSC are the same thing. So, what is the difference between a PJSC and an OJSC?
One of the signs of a PJSC is the free placement of bonds and shares, as well as their admission to trading on stock exchanges;
PJSCs have a more transparent policy for carrying out their activities - there is an obligation to publish lists of shareholders and reports, organize meetings of participants more often and arrange inspections. Activities become more open. This is the main point that shows how a PJSC differs from an OJSC;
Now to accompany entrepreneurial activity, no need to hire a lawyer or contact special law firms, the enterprise will use the services of registrars. They will maintain the register of shares and also certify shareholders' meetings;
Requirements for auditing are increasing.
These are the main points that determine how a PJSC differs from an OJSC. This decision and the entry into force of the law help to increase the transparency of companies’ activities and also prevent raider takeovers.
Public joint stock company is one of the key concepts of the new classification business entities. It is distinguished by openness and transparency of investment processes, an unlimited number of shareholders, and more stringent regulations on corporate procedures. It is this form of ownership that most of the largest organizations in the Russian Federation choose.
The concept of “public joint-stock company (PJSC)” is relatively new in the civil legislation of Russia (introduced on September 1, 2014). It denotes a form of organization of a public company whose shareholders have the right to alienate their shares. Its main differences are
- presence of an unlimited number of shareholders
- free placement and circulation of shares on the securities market
- permission not to contribute funds to the authorized capital of the company until it is registered and an account is opened.
The definition of “public” means that this type The JSC must adhere to a policy of more complete disclosure of information compared to non-public disclosure. This helps to increase the transparency and attractiveness of investment processes (shares are placed and circulated among a wide range of people).
The structure of PJSC can be represented as follows (see Fig. 1)
To understand the features of the creation and activities of a PJSC, let’s compare it with other types of joint stock companies and consider examples of existing organizations with this form of ownership.
Public or open?
Since in regulations There are several concepts that are close to each other in meaning; even among corporate law specialists, debates about their legal interpretation continue. Many questions concern the differences between “new” PJSC and “old” OJSC. At first glance, “only the name has changed,” but this is not so (see Table 1)
| Comparison options | ||
|---|---|---|
| Disclosure |
|
|
| Advantage for purchasing shares and securities | It was possible to reflect in the charter the advantage of purchasing free shares by existing shareholders and security holders | |
| Maintaining a register, availability counting commission | It was allowed to maintain the register of shareholders on their own | The register is kept third-party organizations having a license for this type of activity, the registrar is independent |
| Control | A board of directors was required if the number of shareholders exceeded 50 people | It is mandatory to form a collegial body of at least 5 members |
Thus, although the changes related to public joint stock companies do not seem fundamental, ignorance of them can significantly complicate the life of entrepreneurs who have chosen this form of corporatization.
Public or non-public?
From a layman's point of view, a public joint stock company in its own words is former JSC, and the non-public one is a former closed joint stock company, but this is an overly simplified vision. Let's consider what rules apply in the new classification of business entities to organizations of different legal status:
- A characteristic feature of a PJSC is an open list of prospective buyers of shares, while a non-public joint stock company (NAC) does not have the right to sell its shares through public trading
- The law requires PJSCs to have a clear gradation of issues falling within the competence of members of the board of directors and intended for discussion at the general meeting. NAOs are more free: they can change the collegial governing body to a sole one and carry out other reforms in the activities of governing bodies
- Decisions made general meeting and the status of participants in the PJSC need to be confirmed by a representative of the registrar company. The NAO may contact a notary on this issue
- A non-public joint stock company has the right to include in its charter or corporate agreement a clause stating that, in relation to other interested parties, priority in purchasing shares remains with existing shareholders. While for PJSC this is unacceptable
- All corporate agreements concluded in a PJSC must undergo a disclosure procedure. For the NAO, it is sufficient to notify that the contract has been concluded, and its contents can be declared confidential
- All procedures for the repurchase and circulation of securities, which are provided for by Chapter 9 of Law No. 208-FZ, do not apply to organizations that have officially recorded the status of non-public in their charters.
How to re-register an OJSC into a PJSC?
The renaming procedure is carried out by replacing words in the name of the organization. Next, the charter should be revised, especially as it relates to the board of directors and the rights to preferences when purchasing shares, and brought them into line with the provisions of the legislation on public joint stock companies.
The Civil Code states that the rules on public companies are applicable only to joint-stock companies whose charter and corporate name directly indicate that they are public. These rules do not apply to other legal entities.
The most famous PJSCs in Russia
The largest representatives of this form of ownership regularly top the rankings of the richest organizations in the country and the world. Here are a few legal entities included in the TOP-10 RBC rating for 2015:
