Joint Stock Company

A joint stock company (JSC) is a company, whose authorized capital is divided into a definite number of shares; the owners of the JSC (the shareholders) do not bear liability for its obligations, but do accept the risks involved with losses connected to the JSC’s activity within the value of their shares.

There are two types of JSCs:

►Closed joint stock companies (CJSC)
►Open joint stock companies. (OJSC)

The distinctions between the two abovementioned forms are as follows:

Open Joint Stock Company

Closed Joint Stock Company

Minimum authorized capital is RUR 10 000 (approximately $370)

Minimum authorized capital is RUR100,000
(approximately $3,700)

Unlimited number of shareholders

Shares may be freely sold to third parties

Limited number of shareholders, which cannot exceed 50. Otherwise, the company is subject to reorganization into Open Joint Stock Company within one year. Shares may not be freely sold. Share transfers are subject to preemptive rights of other shareholders.

The management structure of a JSC is similar to the management structure of an LLC. Both open and closed JSCs are obliged to have two governing bodies: the General Shareholders’ Meeting and the Executive Body. The OJSC with over 50 shareholders must have a Board of Directors or Supervisory Council. Furthermore, a JSC must annually undergo a professional outside audit for control and approval of its annual financial reports.

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