Closed Joint-Stock Company is ... Open Joint-Stock Company

Closed Joint-Stock Company is a commercial organization, which is opened by one or several founders. This may be foreign nationals or nationals of the country in which the company is opened, but their number should not be more than 50 people. For CJSC, there is the smallest amount of authorized capital under Russian law, which amounts to 100 minimum wages. His payment can be made in cash or in property. After the registration of the company is given no more than three months to pay half of this amount or more. Another nine months is given to pay the rest of the amount.

Features

A closed joint-stock company is a convenient solution in the sense that the liability of its participants extends only to the funds for which the shares were purchased. If the company needs to close, they will not incur any additional material costs. At the same time, successful business management will allow shareholders to receive certain dividends from securities. Closed joint-stock company (CJSC) differs also in the impossibility of distribution of its securities. In fact, they belong exclusively to a narrow circle of persons, data on which are included in the charter of the enterprise. At the same time, the alienation of shares without the consent of the rest of the enterprise to unauthorized individuals or legal entities is prohibited. Work in the company is not accompanied by mandatory involvement in shareholders. All this becomes a powerful obstacle to attracting outside investments in the main activity of the organization.

But if it was possible to change the composition of the shareholders included in the closed joint-stock company, the founders should not notify any state structures about this. The procedure for the establishment and operation of the CJSC is all spelled out in the Civil Code and some federal laws.

Background and Basics of Creation

Although there was a certain share of joint-stock companies in the economy of the USSR, the modern history of such entrepreneurship started only in the second half of the nineties of the last century, after the Council of Ministers of the RSFSR adopted the Regulations on Joint Stock Companies and Limited Liability Companies. Now there are several documents that regulate the activities of such organizations:

- The Civil Code of the Russian Federation, part one, articles 96-106.

- ФЗ №208-ФЗ of 26.12.96 "On Joint Stock Companies".

- Arbitration Code of the Russian Federation.

- FZ "On Banks and Banking Activities", as well as other laws, which prescribe the procedure for the activities of organizations in the financial market.

- FZ "On the privatization of state property" and the accompanying documents.

Features of the activity

Open and closed joint stock companies are two types of organizational and legal form, which have certain similarities and differences. In the modern Russian legislation there is no data on whether these forms of entrepreneurship are different or they can be only two varieties. To better understand what an open and closed joint-stock company is, a list of their mutual differences will be presented below.

Distinctive features

So, we have come to the definition of the differences between the two types of organizational-right form of activity. A closed joint-stock company is an organization whose shares are distributed only among founders or other persons specified in advance. Such an enterprise is deprived of the right to subscribe for shares. Participants are not allowed to distribute securities among a wide range of legal entities and individuals.

CJSC shares

Another characteristic of a closed joint stock company is that the capital of such a firm is divided into parts that are dispersed among a limited number of shareholders. Each of them has obligations rights in relation to the property of the organization, as well as liability within the limits of these obligations. The distribution of shares among shareholders can be made in various ways, but at the stage of creation it occurs only between the founders. Each of them is entrusted with the right to subsequent sale of securities to new members of the CJSC, including even hired workers' organizations.

The situation in other countries

Abroad, the state is engaged in stimulating the distribution of shares of the company among representatives of the labor collective. For example, in the US, companies that practice this approach receive tax benefits of 5-25% of the base rate. Therefore, work in ZAO is often accompanied by the acquisition of a portion of shares. But not all members of the labor collective are ready to become shareholders. The majority is quite happy with the status of an employee, as they are not ready to take risks, becoming co-owners of securities of the company.

ZAO and LLC

Earlier on the territory of the Russian Federation, the law "On Enterprises and Entrepreneurship" was in force, according to which the CJSC was not separated as an organizational and legal form from LLC. These two types of organizations still have a number of similar features:

- Formation of the authorized capital with its subsequent division into shares is absolutely the same. Each participant of such an organization has his personal share, which serves the object of his possession, disposal and use.

- The liability of shareholders in both forms of ownership is exactly the same, the participants bear the risk of losses only within the ownership of shares.

- The distribution of property and income of this economic company due to liquidation is completely identical. The property and profit of each of the above-mentioned business entities shall be distributed accordingly to the shares of participants in the authorized capital, unless otherwise specified in the constituent documents.

- A closed joint-stock company, like LLC, assumes that its members have the same roles in its management. Opportunities of each shareholder directly depend on the size of its share in the authorized capital, if the constituent documentation does not contain other information.

- In ZAO and LLC, the nature of the participation is closed, which presupposes a clearly fixed membership of the participants, the presence of a restriction on this composition, the obligatory consent of all participants in attracting a new one.

- Both these forms of organizations apply the same approach to determining the possibility of establishment by a single person. In this case, a joint-stock company can not belong to a single participant in the event that this is another economic company, which includes only one founder.

Changes in legislation

In recent years, active work was being done to ensure that ZAO could not be identified with LLC, therefore, in the process of developing the Civil Code of the Russian Federation and the laws that followed it, the distinctive features that these forms of organizations possess are:

- LLC can issue securities, but they can not issue shares, allowing to determine the share of participation of legal entities and individuals in the authorized capital with subsequent accrual of dividends. A CJSC is obliged to issue securities. At the same time, it is mandatory to register the shareholders' register, where all participants of the organization will be contributed, which is not used for the LLC.

- The shares of the LLC members in the authorized capital can be divided into any number of parts, while the shares of the shareholders are indivisible. This means that no participant can sell or transfer its share of the charter capital.

- CJSC shares are not only an indicator of property, but also an object of inheritance. It turns out that the successors of the shareholders of ZAO must necessarily be admitted to the membership in the process of entering into the right of inheritance. In LLC this feature is absent.

- In the event of withdrawal from the LLC, participants may require the allocation of shares in the property belonging to them, if it is prescribed in the charter, but the shareholders of ZAO can not put forward such claims. It turns out that shareholders do not have the opportunity to insist on the return of the CJSC of their funds or on the payment of the value of its shares, they can only ask the remaining participants to consent to the transfer of shares to other shareholders or third parties. To do this, you may need to reorganize the company.

- In a closed joint-stock company, a register of shareholders must necessarily be kept, in which it is required to indicate information about each registered person, as well as on the size and composition of the stake that belongs to him.

- Open and closed joint-stock company is taxed differently. In the process of issuing new shares, LLC is obliged to pay a tax, the amount of which is 0.8% of the nominal value of the issued securities.

- In LLC, the cost of opening is always less than in ZAO.

Closed Joint-Stock Company: creation

Sometimes the company is formed because the founders want to create a joint stock company, although the company could become the object of the foundation. This is due to the fact that the term "joint-stock company" sounds much more solid and impressive than a limited liability company. The inhabitants perceive such a business as more stable, respectable and prestigious. Therefore, the private entrepreneur will try not to miss this opportunity, disguising himself as a shareholder of ZAO with a single founder.

Classic approach

Closed joint stock company is an association of the capital of participants, the composition of which must be formed as a result of the personal choice of each of the shareholders. Any person who has bought at least one share in ZAO becomes a professional co-owner of this joint-stock company with certain important characteristics:

- the shareholders do not bear subsidiary responsibility related to the liabilities of the structure to creditors;

- CJSC possesses property completely isolated from property of shareholders, and therefore in case of insolvency of the company the risk of shareholders will be only because of depreciation of the shares belonging to them;

- CJSC shareholders have property and personal rights.

If we talk about working in ZAO, then there are no differences from other organizations. The recruitment, payment of wages and bonuses, as well as dismissal are carried out in accordance with labor legislation.