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What is a public joint stock company? Description and definition of the concept.
A public (formerly open) joint-stock company (PJSC, formerly OJSC) is a legal entity whose securities and shares are in open circulation and access. The name of such a joint stock company, as well as its charter, contains the word “public”, previously “open”. Typically, such a company is usually classified as a corporate organization, that is:
- in relation to PJSC, participants have corporate rights;
- founders and participants of PJSC have the right to membership in them.
Thus, now any joint stock company (JSC), whether public or non-public (previously closed), including a limited liability company (LLC), is called a commercial corporate organization or corporation. As for a public joint-stock company, it must disclose information required by law, and it must do this on a regular basis.
Let's take a closer look at what a public joint stock company means.
Starting from September 1, 2014, all JSCs that met the definition of publicity automatically turned into PJSCs. And subsequently the provisions of the updated Civil Code of the Russian Federation are applied to them (Federal Law No. 99 of 05/05/2014)
According to the adopted legislation, it is impossible to create a JSC immediately as a public one.
It is worth noting that this change in the procedure for founding a PJSC came into force on July 1, 2015. Now, first you need to register a non-public JSC, and only then obtain “public” status for it.
As for the direction of the organization’s activities, it can be absolutely anything, but not prohibited by the current legislation of the Russian Federation. However, only one can be the main activity of a society.
Certain types of activities require special licensing . This license is acquired after completing the PJSC registration procedure.
The legislation of the Russian Federation obliges all public joint stock companies to post the results of their annual report on their official websites. There is also a special procedure for checking these reporting results. Thus, the results of the company’s annual activities are checked for compliance with reality by third-party auditors.
Shares and maintaining the register of shareholders of PJSC. Property fund
As already noted, shares of public joint stock companies must be placed and continue to circulate in the public domain (in accordance with Article 66.3 of the Civil Code of the Russian Federation). Thus, if the management of a closed joint-stock company decides to become open, then it will have to
change the policy on working with securities and add the word “public” to the name of the company. As for closed joint-stock companies (which remained in their previous form), the provisions of Federal Law No. 208 will apply.
The par value of any ordinary shares of a joint stock company is the same. At the time of establishment of the company, absolutely all registered shares must be distributed among all founders (Article 25 of Federal Law No. 208).
In a PJSC, a shareholder has no limit on the total number of shares owned by him. There are also no restrictions on their total nominal value and the maximum number of votes that are granted to an individual shareholder (Article 97 of the Civil Code of the Russian Federation). The charter of a joint-stock company cannot contain a clause on the need for consent for the alienation of company shares. Also, no one has an advantage over the possible acquisition of shares of a PJSC; this is possible only as an exception (clause 3 of Article 100 of the Civil Code of the Russian Federation).
The Company has the right to place ordinary and preferred shares (both one and several types). But at the same time, the par value of all outstanding preferred shares cannot be higher than 25% of the authorized capital of the joint-stock company (Article 25 of Federal Law No. 208).
Starting from October 1, 2014, the register of shareholders of each JSC must be maintained exclusively by specialized registrars who are licensed to do so (Federal Law No. 142 of July 2, 2013). If you remember, previously companies with up to 50 shareholders could maintain the register independently. Now there are no exceptions. Moreover, each JSC that has not transferred the register to a third-party registrar faces a fine of up to 1 million rubles.
The property funds of a public joint-stock company are primarily formed through the turnover of securities and shares of the organization. At the same time, the net profit received in the future while the organization conducts its activities may be included in the property fund. Current legislation does not prohibit this.
Shares and property fund
According to Art. 66.3 of the Civil Code of the Russian Federation, shares of PJSC are in the public domain. Thus, when a NJSC decides to transform into a PJSC, it is necessary to change the work with the Central Bank. The par value of all shares is the same. When an organization is formed, all shares are registered and distributed among the founders. PJSC can place ordinary and preferred shares. However, the cost of the latter cannot exceed 25% of the charter capital of the PJSC.
The property fund of the PJSC is formed as a result of the turnover of the Central Bank and shares of the company. In addition, it may also include the company’s net profit received in the conduct of its activities.
Authorized capital of PJSC
Information about the authorized capital of a PJSC is contained in the charter of this company. The size of the authorized capital of a PJSC is determined by federal legislation (Article 2 of Federal Law No. 208). The formation of the authorized capital of a PJSC occurs due to the fact that shares are issued for a certain amount of money. Also, the authorized capital of a joint-stock company is divided into a fixed number of shares, certifying the binding rights of all shareholders in relation to the company. Thus, the authorized capital of a PJSC is compiled on the basis of the par value of all its shares acquired by shareholders. The authorized capital also determines the minimum amount of company property that guarantees the interests of creditors.
The total amount of the authorized capital in the case of a PJSC is a certain value that can vary significantly, either decrease or, on the contrary, increase. Such fluctuations primarily depend directly on how the shares of a particular company are redeemed. Further, examining the differences between public and non-public joint-stock companies, the minimum amount of authorized capital for a public joint-stock company will be mentioned, which, by the way, is 100 thousand rubles.
In practice, it is clear that the control exercised by inspection bodies is much stricter than in the case of other JSCs. The explanation for this is that absolutely all statutory documents indicate that the mentioned company is as open as possible to all third parties. In other words, it should be completely obvious that the company's shares can be purchased by all interested citizens. Consequently, all supervisory authorities require maximum accessibility and transparency of all PJSC data.
Before registering a company, the founders enter into a special agreement. It takes into account the following points: types and categories of shares, the size of the authorized capital, the procedure and amount of their payment, etc. But it is worth noting that this agreement does not serve as a constituent document. Its effect remains in force until the moment specified in the agreement, until each of the shares is paid for by the shareholders. However, there are cases when a company has one founder. Then a similar list is in his decision.
Authorized capital
- One of the features of a PJSC is that there is no need to contribute funds to the authorized capital of a legal entity before registering it and opening a savings account.
- Shares issued by a PJSC for any amount of money form the authorized capital of a public joint stock company. The size of the authorized capital of a PJSC can either decrease or increase, since it is a variable value and depends on how soon all the shares put on the market will be repurchased.
- State control over the authorized capital of public joint stock companies is more stringent, this is explained by the fact that shares of an economic entity can be purchased by anyone.
Management and statutory documents of PJSC
PJSC management is carried out through a collegial body . The number of its members cannot be less than 5 people. Order
The formation of the collegial management body of the company and its powers are regulated by current federal legislation, namely Law No. 208 and the charter of the company itself (Article 97 of the Civil Code of the Russian Federation).
The management body of the joint-stock company is elected by the founders of the company, who are also shareholders. The governing body that is elected must collect 3/4 of the votes of the founders-shareholders of the JSC (Article 9 of Federal Law No. 208). These management bodies include:
- General Meeting of Shareholders;
- board of directors (in other words, supervisory board);
- General Director (sole executive body);
- executive directorate (board, collegial executive body);
- audit committee.
The main body for conducting and regulating the management activities of a PJSC is the general meeting of shareholders.
Often it is carried out once throughout the year. The initiator is the board of directors. If a special need arises, the meeting may be held on the initiative of the audit commission, or even due to the results of the audit.
A board of directors is elected at the general meeting of shareholders . The general director of the PJSC is nominated and elected by the same meeting or even the board of directors. It all depends on the procedure prescribed in the company’s charter.
Sometimes a situation may arise that a public joint-stock company will issue a fairly large number of its own shares to the market, and then the number of their holders will number more than a hundred, or even several hundred citizens. As a result, bringing them all together at one time becomes an almost impossible task. Therefore, there are several options to solve this problem:
- the number of shares whose owners have the right to participate in the general meeting of shareholders is limited;
- Discussions can be conducted remotely. To do this, for example, you can resort to the method of sending out questionnaires.
The responsibilities of the general meeting of shareholders include making all important decisions on the activities of the PJSC, planning events aimed at developing the company in the future. Throughout the rest of the time, all responsibilities for managing the organization are performed by the board of directors. In fairly large PJSCs, the number of members of the board of directors can be up to 12 people.
If we recall again the changes introduced on September 1, 2014, it is worth mentioning the procedure for preparing and holding a general meeting of shareholders. Thus, the obligation was introduced for PJSC to certify the decisions of the general meeting of shareholders by a person who maintains the register of shareholders and performs certain functions of the counting commission.
Regarding the mentioned changes, it is worth saying that thanks to them, the responsibility of authorized persons and members of the collegial management body of the joint-stock company has increased. And the obligation to speak in the interests of the organization was also established.
The main document for a public joint stock company is the charter . This, as a rule, describes all the provisions that regulate the activities of the organization. It also contains all the information about the openness of society.
The PJSC Charter contains in detail the procedure for issuing shares, including information on the procedure for making payments and the calculation of dividends.
