Why do they change OJSC to PAO? Requirements applicable to PJSC

A subject of economic relations organized on the basis of a voluntary agreement of several persons or organizations.

The capital of a joint-stock company is formed through the issue and sale of issued shares. The fundamental purpose of a corporation is to conduct business activities that are aimed at obtaining maximum profits in the interests of shareholders.

A joint-stock company is a legal entity whose capital consists of contributions from shareholders and founders. Shareholders are not liable for the JSC's obligations, due to which their possible losses are limited only by the value of previously acquired securities.

The founders of the corporation are responsible for the performance of the company in the amount of the share contribution contributed to the authorized fund. The main governing body is the general meeting of shareholders. The organizational structure of the joint-stock company is complex, but membership, regardless of share, is reliable.

A share is a financial document that confirms the shareholder’s contribution to the authorized capital of the company and gives him the right to:

• receiving part of the profit (dividend);
• participation in enterprise management;
• receiving a property share if the organization is declared bankrupt or liquidated.

Joint stock companies are represented by two main types.

• Open joint-stock companies (OJSC).
• Closed joint stock companies (CJSC).

Such structures can function in any field of activity: industrial, commercial, intermediary, banking, insurance, etc.

Types of shares in JSC

According to the form of assignment of income, shares of joint stock companies can be divided into two types:

• simple;
• privileged.

In the first case, security holders have:

• the right to vote during general shareholder meetings (one vote = one share. The more securities a shareholder owns, the more significant his vote during meetings);
• the right to receive dividends (part of the profit) in the amount equivalent, the amount of which depends on the results of the corporation’s work and is no longer guaranteed.

Joint-stock companies can independently manage their capital due to the fact that shareholders do not have the right to demand that the company return the deposited amount of funds. If a company fails to pay dividends or stockholders receive new shares instead of cash, shareholders cannot sue for the money or declare the company bankrupt. Each of the shareholders is a co-owner of the capital of the joint-stock company. Each of them voluntarily assumed responsibility for possible risks associated with losses of the enterprise or its bankruptcy. By decision of the meeting of shareholders, the corporation has the right to distribute only part of the profits, leaving the undistributed share at its disposal.

Owners of preferred shares cannot participate in voting during shareholder meetings, but this type of securities gives them the right to receive guaranteed income, regardless of what results the company achieves. In the event of a company's bankruptcy, holders of preferred shares receive the right of first priority in payment of the par value of the securities.

Joint-stock companies maintain an accounting book (register) in which data on the holders of registered shares is necessarily recorded. Registration is required not only upon first receipt, but also upon subsequent resale of securities. This allows you to create a kind of insurance against the purchase of a controlling stake (more than 51% of all issued shares) by people whose financial investments are of dubious origin. Bearer shares are allowed for free circulation on the stock market.

Public joint stock company is a new term in Russian civil legislation. At first glance, it may seem that non-public and public joint-stock companies are just new names for CJSC and OJSC. But is this really so?

What does public joint stock company mean?

Federal Law No. 99-FZ dated 05.05.2014 (hereinafter referred to as Law No. 99-FZ) added a number of new articles to the Civil Code of the Russian Federation. One of them, Art. 66.3 of the Civil Code of the Russian Federation, introduces a new classification of joint stock companies. The already familiar CJSC and OJSC have now been replaced by NJSC and PJSC - non-public and. This is not the only change. In particular, the concept of an additional liability company (ALS) has now disappeared from the Civil Code of the Russian Federation. However, they were not particularly popular anyway: according to the Unified State Register of Legal Entities as of July 2014, there were only about 1,000 of them in Russia - with 124,000 closed joint-stock companies and 31,000 open joint-stock companies.

What does a public joint stock company mean? In the current version of the Civil Code of the Russian Federation, this is a joint-stock company in which shares and other securities can be freely sold on the market.

The rules on a public joint stock company apply to a joint-stock company whose charter and name indicate that the joint-stock company is public. For PJSCs created before 09/01/2014, whose corporate name contains an indication of publicity, the rule established by clause 7 of Art. 27 of the Law “On Amendments...” dated June 29, 2015 No. 210-FZ. Such a PJSC that does not have public issues of shares before July 1, 2020 must:

• apply to the Central Bank for registration of the prospectus of shares,
• remove the word “public” from its name.

In addition to shares, a joint-stock company can issue other securities. However, Art. 66.3 of the Civil Code of the Russian Federation provides for public status only for those securities that are converted into shares. As a result non-public companies may introduce securities into public circulation with the exception of shares and securities convertible into them.

What is the difference between a public joint stock company and an open one?

Let's consider difference from JSC. Although the changes are not fundamental, ignorance of them can seriously complicate the life of the management and shareholders of the PJSC.

Disclosure

If previously the obligation to disclose information about the activities of an OJSC was unconditional, now a public company has the right to apply to the Central Bank of the Russian Federation for exemption from it. This opportunity can be taken advantage of public and non-public companies, however, it is for the public that liberation is much more relevant.

In addition, JSCs were previously required to include information about the sole shareholder in the charter, as well as publish this information. Now it is enough to enter data into the Unified State Register of Legal Entities.

Preemptive right to purchase shares and securities

The OJSC had the right to provide in its charter for cases when additional shares and securities are subject to preferential purchase by existing shareholders and security holders. Public joint stock company is obliged in all cases to be guided only by the Federal Law “On Joint-Stock Companies” dated December 26, 1995 No. 208-FZ (hereinafter referred to as Law No. 208-FZ). References to the charter are no longer valid.

Maintaining a register, counting commission

If, in some cases, an OJSC was allowed to maintain a register of shareholders on its own, then public and non-public joint stock companies are always required to delegate this task to specialized licensed organizations. At the same time, for a PJSC, the registrar must be independent.

The same applies to the counting commission. Now issues within its competence must be resolved by an independent organization that has a license for the relevant type of activity.

Society management

Public and non-public joint-stock companies: what are the differences?

1. By and large, the rules that previously applied to OJSC apply to PJSC. NAO is basically a former closed joint-stock company.
2. The main feature of a PJSC is an open list of possible buyers of shares. NJSC does not have the right to offer its shares at public auction: such a step, by force of law, automatically turns them into a PJSC even without amending the charter.
3. For PJSC, the management procedure is strictly enshrined in law. For example, the rule still remains that the competence of the board of directors or executive body cannot include issues that are subject to consideration by the general meeting. A non-public company can transfer some of these issues to a collegial body.
4. The status of participants and the decision of the general meeting in a PJSC must be confirmed by a representative of the registrar organization. The NAO has a choice: you can use the same mechanism or contact a notary.
5. Non-public joint stock company still has the right to provide in the charter or corporate agreement between shareholders the right to pre-emptive purchase of shares. For public joint stock company such an order is absolutely unacceptable.
6. Corporate agreements concluded in PJSC must be disclosed. For a NAO, it is sufficient to notify the company of the fact of concluding such an agreement.
7. The procedures provided for by Chapter XI.1 of Law No. 208-FZ regarding offers and notifications of repurchase of securities, after September 1, 2014, do not apply to JSCs that, through changes in the charter, have officially recorded their non-public status.

Corporate agreement in joint stock companies

An innovation that largely concerns PJSC and NJSC is a corporate agreement. Under this agreement, concluded between the shareholders, all or some of them undertake to exercise their rights only in a certain way:

• take a unified position when voting;
• establish a common price for all participants for the shares they own;
• allow or prohibit their acquisition in certain circumstances.

However, the agreement also has its limitations: it cannot oblige shareholders to always agree with the position of the managing bodies of the joint-stock company.

In fact, ways to establish a unified position for all or part of the shareholders have always existed. However, now changes in civil legislation have transferred them from the category of “gentleman’s agreements” to the official level. Now, violation of a corporate agreement may even become a reason to recognize the decisions of the general meeting as illegal.

For non-public companies, such an agreement may be an additional management tool. If all shareholders (participants) participate in a corporate agreement, then many issues related to the management of the company can be resolved through changes not in the charter, but in the content of the agreement.

In addition, an obligation has been introduced for non-public companies to enter information about corporate agreements into the Unified State Register of Legal Entities if, under these agreements, the powers of shareholders (participants) seriously change.

Renaming the OJSC into a public joint stock company

For those OJSCs that decided to continue operating in the status public joint stock company, it is necessary to make changes to the statutory documents. There is no deadline for this by law, but it’s better not to delay it. Otherwise, problems may arise in relations with counterparties, as well as ambiguity about what rules of law should be applied to PJSC. Law No. 99-FZ establishes that the unchanged charter will be applied to the extent that does not contradict the new norms of the law. However, what exactly is contradictory and what is not is a moot point.

Renaming can occur in the following ways:

1. At a specially convened extraordinary meeting of shareholders.
2. At a meeting of shareholders that resolves other current issues. In this case, changing the name of the JSC will be highlighted as an additional issue on the agenda.
3. At a mandatory annual meeting.

Re-registration of old organizations into new public and non-public legal entities

The changes themselves can only affect the name - it is enough to exclude the words “open joint-stock company” from the name, replacing them with the words “ public joint stock company" However, it is necessary to check whether the provisions of the previously existing charter do not contradict the norms of the law. In particular, special attention should be paid to the rules relating to:

• board of directors;
• preemptive right of shareholders to purchase shares.

In accordance with Part 12 of Art. 3 of Law No. 99-FZ, the company will not need to pay state duty if the changes concern bringing the name into compliance with the law.

In addition to JSC, signs of publicity and non-publicity now apply to other organizational forms of legal entities. In particular, the law now directly classifies LLCs as non-public entities. For a public joint stock company, changes must be made to the charter. But is this necessary for those companies that, by virtue of the new law, should be considered non-public?

In fact, for non-public companies, making changes is not necessary. Nevertheless, it is still advisable to make such changes. This is especially important for former closed joint stock companies. Otherwise, such a name will be a defiant anachronism.

Sample charter of a public joint stock company: what to pay attention to?

In the time that has elapsed since the adoption of Law No. 99-FZ, many companies have already gone through the procedure of registering changes to the charter. Those who are just about to do this can use the sample charter of a PJSC.

However, when using a sample, you must first of all pay attention to the following:

• The charter must contain an indication of publicity. Without this, society becomes non-public.
• It is imperative to involve an appraiser in order for a property contribution to be made to the authorized capital. Moreover, in the event of an incorrect assessment, both the shareholder and the appraiser must answer subsidiarily within the limits of the overstatement amount.
• If there is only one shareholder, he may not be indicated in the charter, even if the sample contains such a clause.
• It is possible to include provisions on the audit procedure in the charter at the request of shareholders owning at least 10% of the shares.
• Conversion into a non-profit organization is no longer allowed, and there should be no such provisions in the charter.

This list is far from complete, so when using samples you should carefully check them with current legislation.

The term "public joint stock company": translation into English

Since many Russian PJSCs carry out foreign trade operations, the question arises: what should they now be officially called in English?

Previously, the English term “open joint-stock company” was used in relation to JSC. By analogy with it, the current public joint stock companies can be called a public joint-stock company. This conclusion is confirmed by the practice of using this term in relation to companies from Ukraine, where PJSCs have existed for a long time.

In addition, the difference in right-wing terminology in English-speaking countries should also be taken into account. Thus, by analogy with UK law, the term “public limited company” is theoretically acceptable, and with US law - “public corporation”.

The latter, however, is undesirable, since it may mislead foreign counterparties. Apparently, the public joint-stock company option is optimal:

• it is used mainly only for organizations from post-Soviet countries;
• quite clearly marks the organizational and legal form of society.

So, what can ultimately be said about innovations in civil legislation concerning public and non-public legal entities? In general, they make the system of organizational and legal forms for commercial organizations in Russia more logical and harmonious.

It is not difficult to make changes to the statutory documents. It is enough to rename the company according to the new rules of the Civil Code of the Russian Federation. The legalization of agreements between shareholders (corporate agreement in accordance with Article 67.2 of the Civil Code of the Russian Federation) can be considered a step forward.

Both for the state and for society as a whole, the division of persons into individuals and legal entities has special importance. Moreover, it is a fundamental factor for many articles of the Civil, Administrative, Labor and other codes of the Russian Federation.

Comparison of a legal entity and an individual

In order to take into account the interests of individuals as much as possible, you need to know whether this person is an individual or a legal entity. Legal capacity, risks, properties - for individuals and legal entities many differences. So, first let's look at these two concepts.

Individual is a person, with or without citizenship, who has responsibilities and rights simply because he exists. By virtue of his birth, he has legal capacity, and legal capacity is determined by his age. Legal capacity and legal capacity can only be limited by a court decision, or in accordance with the law.

Entity is an organization that has been registered in accordance with all the rules defined by law. This organization may have as its main goal both making a profit and simply working for a society or idea.

Legal entities, as a rule, have an organizational form. So, the most common form is an LLC, but a legal entity can also be a joint stock company, etc.

Let's consider the main differences between an individual and a legal entity.

1. Emergence. Thus, an individual arises at the moment of his birth, an organization at the moment of its registration.
2. Capacity. The organization is valid from the moment of its registration until the moment of liquidation. An individual can be either partially or fully capable depending on age and medical indications.
3. Responsibility. A company can only be brought to civil and administrative liability; in addition to the above, a person can also be held criminally liable.
4. Termination of activities. An individual ceases to exist only at the time of death, a company - after the completion of its liquidation process.

Advantages of opening an LLC

A limited liability company is considered the most optimal organizational form when creating a company among entrepreneurs. Let's look at the main positive aspects of creating an LLC.

OOO - the simplest organizational form of all possible for opening an organization. However, even it has some disadvantages, which, compared to the advantages, do not seem so significant.

Thus, the number of company members cannot exceed 50 people. If the number of participants goes beyond this limit, then the entrepreneur must reorganize the company. Moreover, if the management structure of an LLC changes, then each change must be accompanied by amendments to the constituent documents.

Closed list of non-profit organizations

On September 1, 2014, the Civil Code of the Russian Federation entered amendments regarding non-profit organizations. In particular, a special closed liver for non-profit organizations was created.

Thus, non-profit organizations that were founded before September 1, 2014 were required to bring their name into compliance with this list at the first opportunity to make changes to the constituent documents.

This list includes the following types of non-profit organizations:

• , including charitable ones;
• cooperatives (for example, gardening or garage cooperatives);
• public organizations (political parties, territorial self-governments, etc.);
• unions (for example, commercial and industrial);
• homeowners associations;
• Cossack societies;
• communities;
• autonomous non-profit organizations;
• religious companies;
• public legal organizations.

The changes that were made to the Civil Code of the Russian Federation are primarily related to the fact that before them there was confusion in the forms of non-profit companies. Thus, the list of non-profit companies allowed for registration was expanded, and each form had its own rules.

The changes also affected the provision of profit-making by non-profit organizations. They were allowed to receive income, but for this the organization must have property worth at least 10 thousand rubles.

Similarities and differences

In other forms, conducting an organization's activities appears to be a more complex process. OJSC, PJSC, CJSC have both disadvantages and advantages in relation to LLC. Let's look at the main ones.

Like LLCs, CJSCs, OJSCs and PJSCs, they accept as the main constituent document charter. In the case of a closed joint stock company, the registration process is more complex and involves not only making an entry in the Unified State Register of Legal Entities, but also registering with the FSFM (Federal Service for Financial Markets) for the purpose of issuing shares. The authorized capital of a closed joint stock company, unlike an LLC, does not consist of shares, but of the number of shares of participants.

The number of participants in a CJSC can be any, as in OJSC and PJSC. LLC implies a number of participants of no more than 50 people. You can sell a share in an LLC based on the minutes of the general meeting of participants, while in a closed joint-stock company a participant must sell shares to other community members.

In the case of an OJSC, everything is a little simpler: when leaving the company, a participant can sell shares both to its other participants and to complete strangers.

As a rule, when publishing about constituent documents there is no need to commit, while when creating a closed joint-stock company, publication of open reporting is required. OJSC, like LLC, does not imply publications.

PJSC is the least common form of non-profit organization only because the authorized capital of the company must be 1000 times the minimum wage or more. There are no restrictions on the number of participants in PJSC. It is not obliged to publish reports publicly.

Thus, it is quite difficult for an inexperienced specialist to understand all aspects of the activities of the above-mentioned organizational forms of enterprises. To summarize, we can conclude that an LLC is suitable for small organizations that do not intend to issue shares and also scale their activities. If an entrepreneur has a really big business in mind, then a joint stock company is more suitable for him.

Registration procedure and subsequent procedures

In order to start activities, regardless of the form of organization, the enterprise must be registered. Registration is a complex procedure and requires the entrepreneur to go through mandatory stages, regardless of the chosen form of ownership.

Thus, a package of documents for registration must be submitted to the Federal Tax Service. Documents are provided either personally by the entrepreneur or sent by mail. Also, one of the most common methods of submitting documents is electronic document management.

The applicant for registration of any of the above-mentioned legal entities can be either the founder or the head of the future organization. Each document submitted to the tax office for registration, if it contains more than one sheet, must be bound and numbered, and also certified either by the founder himself or by a notary.

In order to register a legal entity, it is necessary to pay a fee in the amount of 4 thousand rubles. The date of submission of documents is the date when the Federal Tax Service received the package of papers for registration. As soon as the documents are accepted, information about them is entered into the registration book.

The applicant must be issued a receipt for receipt of documents. If he submitted the documents not in person, but by mail, then a receipt is sent to his address on the business day following receipt of the documents.

Registration is carried out within 5 working days, during which the tax office verifies the accuracy of the data provided for registration. After registration of the newly formed organization, a certificate is issued confirming the fact of its registration.

After registration with the Federal Tax Service, the tax office transfers documents for registration to extra-budgetary funds, which, as soon as possible, register the new organization with them. The moment of registration is the date the enterprise is registered with the tax authority.

Sometimes registration is refused, and there is a a few reasons:

• provision of an incomplete package of documents;
• making errors during registration;
• the rules for the name of the organization were violated (the Civil Code of the Russian Federation contains certain requirements for company names);
• lack of date on documents (in particular on the charter);
• failure to pay state registration fees;
• indication of false data or falsification.

After completing the registration process, the company, regardless of its form of ownership, is required to open a bank account and get a stamp.

Speech by Anton Sitnikov about LLC, OJSC and CJSC in the program “Stroeva.delo”.

Why were OJSC and CJSC abolished?

Discussion of amendments to the Civil Code of the Russian Federation regarding the abolition of OJSC and CJSC began back in 2012. Thus, from September 1, 2014, such forms of organizations ceased to exist.

In addition, the change also affected ALC (additional liability company). Now, instead of OJSC and CJSC, there are public and non-public companies. Let's figure out what the difference is between them.

Public joint stock company is an organization whose shares must be placed on the securities market. Thus, anyone can purchase shares. Moreover, the organization must necessarily indicate in the charter and other constituent documents that it is public.

Organizations registered as a CJSC or OJSC before September 1, 2014 were required to make changes regarding their publicity or non-publicity as soon as possible after the adoption of the amendments.

Non-public joint stock company is an organization that does not place its shares on the securities market. Thus, only a limited number of people can purchase shares.

On September 1, 2014, the ALC was also abolished; now it is a priori considered a non-public joint-stock company without the right to place shares on the securities market.

Changes applicable to such organizations increase the powers of the state to control them. Thus, each joint-stock company, regardless of its publicity, must undergo an annual audit of its activities, which was previously carried out only for open joint-stock companies.

If entrepreneurs do not care about placing their shares on the market, then a non-public joint stock company is more attractive to them in order to reduce reorganization costs and avoid new obligations regarding shares.

This video explains more about the conversion.

At the moment, in the economy there are many organizational forms for carrying out entrepreneurial 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, in order to accompany business activities, there is no need to hire a lawyer or contact special law firms; the enterprise will turn to 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.