There have been significant changes in the limitations on business entities in the Russian Federation in recent years.
As of September 2014, all the legal entities are divided into corporate and unitary entities.
Under the Russian corporation laws, joint-stock companies and limited liability companies are the two most common types of corporate legal entities.
Only a joint-stock company is allowed to issue shares. Under the current legislation, joint-stock companies can be further divided into two kinds – public and non-public. Our team of lawyers and accountants is at your service if you would like to set up a joint-stock company in Russia.
- Public joint-stock company
- Non-public Joint Stock Company
- Process for opening a joint-stock company in Russia
- What are the conditions for JSCs in Russia?
- Is an auditor necessary for joint-stock companies in Russia?
- Is JSC easy to register in Russia?
- JSC liquidation in Russia
- What are the advantages of joint-stock companies in Russia?
- FAQ about joint-stock companies in Russia
- Legislation and corporate governance
- Service prices for opening company in Russia for LLC | JSC
Public joint-stock company
The key characteristics of a public joint-stock company incorporated in Russia are as follows:The legal name and the pact of the company must show that it is a public entity;
- There is no limit on the numeral of shareholders;
- The company is allowed to allocate shares via open subscription and via the stock exchange;
- It may not have as its sole shareholder another enterprise entity consisting of a single entity;
- The charter capital must be at least 1,000 times of the statutory monthly lowest wage (in the current term, RUB 100,000);
- The company board of directors shall consist of at least five members;
- An independent licensed organization must do the functions of the Registrar. The counting commission Charter cannot relate to the competence of the general meeting of shareholders for parts not listed by the Russian Federation Civil Code and the laws on the joint-stock company.
Non-public Joint Stock Company
The critical elements of a non-public joint-stock company incorporated in Russia are as follows:
- The stakes and securities of the company are not publicly listed, and it is not open for subscription;
- No commitment 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 limited;
- The charter capital must be at least ten times the statutory monthly minimum wage (in the current term, RUB 10,000);
- The company’s charter can make a connection to the competence of the general meeting of shareholders for functions not listed by the Russian Federation Civil Code and the laws on the 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 State Committee;
- Registration with the tax authorities;
- Company seal creation;
- Signup 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 company incorporation process in Russia for a joint-stock company could take up to two months. In some circumstances, approval of the Federal Antimonopoly Service may be required depending on the size and significance of the support or revenue of the founders. Our specialists Russia can assist you through the registration procedure.
What are the conditions for JSCs in Russia?
There are no harsh conditions for joint-stock company incorporation in Russia; however, it is advised to pay attention to the initial capital of RUB 100,000, for which half of it can be paid within three months, in the case of open ones.
The exact thing is known for closed joint-stock companies with the mention that such entities can be recorded with a minimum share capital of RUB 10,000.
As for the managing board of joint-stock companies in Russia, at least five members are required, and one general meeting is required each year.
It is essential to know that a joint-stock company can be represented jointly or separately by a few “one-person” executive bodies, as defined by the Company Act in Russia. This kind of body is in charge of daily management operations in the firm, mentioning that reporting is required. 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 significant rule linked to joint-stock companies in Russia refers to the internal auditor required for such kinds of entities, mentioning that the company’s shareholders must appoint them. If the owners do not want an internal auditor, the Internal Auditing Commission can provide auditing services for the established joint-stock company in Russia.
Our local team of accountants can provide complete information about audits in Russia.
Is JSC easy to register in Russia?
Yes, the exact requirements for registering a limited liability company apply to joint-stock companies in Russia, observing that the issuance of company stocks is created 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 appropriate legislation and the conditions 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 of the Commercial Code if a court of law issues a decision in this sense. There is also the possibility of voluntarily company liquidation, indicating 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 requirements 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 think 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, including 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 extensive capital contributed to the company.
• The owners select the directors of joint-stock companies in Russia.
• Joint-stock companies in Russia can use fiscal funds and liquid assets.
FAQ about joint-stock companies in Russia
1. Is there a limit in case of the number of shareholders of JSCs in Russia?
There is no limit 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 recorded on the stock exchange in Russia or beyond 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 is required for opening closed JSCs and RUB 100 000 for an open joint-stock company in Russia. Feel free to ask any questions about opening a joint-stock company in Russia.
4. Is the general meeting necessary for JSCs established in Russia?
Yes, it is mandatory to have a general meeting as owners of joint-stock companies in Russia. This needs to occur once a year, whether in Russia or another country.
5. Who can form joint-stock companies in Russia?
Any domestic or foreign investor examining for business in Russia at a large scale can decide on registering a joint-stock company, respecting the applicable ruling in this country. Although it is not a complex registration procedure, it is recommended to ask for our company formation specialists in Russia to let us handle the entire process.
Legislation and corporate governance
The incorporation and operation of a joint-stock company in Russia are 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 protection market, if shares are issued.
Although not required, joint-stock enterprises are advised to observe the Code on Corporate Governance adopted by the Central Bank of Russia.