First of all, let's figure out what the decryption of LLC, ZAO, JSC is fraught with. An LLC is a limited liability company, enterprises ending in joint-stock companies are joint-stock companies whose authorized capital is divided into a certain number of shares, and their owners, respectively, are shareholders. They, unlike the participants in the LLC, do not bear any responsibility in relation to the community, the risk of their losses is strictly limited by the value of the shares that they have on hand. Also, an LLC is usually a small company, the activity of which covers a small industry of small business, and joint-stock companies are already the prerogative of medium or large businesses.
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Its founders are an individual or legal entity, or an association of persons. One of their responsibilities is to form a common authorized capital and divide it among themselves into shares. The founders are not liable for the obligations of the LLC, and the risk of losses for each is proportional to its share in the authorized total capital.
The purpose of this association is purely commercial, it is to profit from the activities and the distribution of these funds among themselves. All participants have the right to strategically manage a commercial organization. This right is exercised in holding regular meetings. If you wish, you can expand your competence or transfer part of your rights to another member of the association. Everyone also has the opportunity to sell their share and leave the community. Usually, only participants in a given LLC are entitled to buy its share; in such organizations transfer of shares to third parties is not welcome. If you are interested in the creation of such an association - for starters, read Federal Law No. 208-ФЗ On Joint-Stock Companies of December 26, 1995, it contains all the most important and interesting information.
Two types of AO - CJSC and OJSC
CJSC, the abbreviation for this is explained, is a closed joint-stock company, and OJSC, respectively, is open.
Russian laws permit open, closed joint stock companies. In closed shares they can be distributed only among the founders or in the agreed circle of persons, and in open shares, in addition to the founders, there may be third parties.
Legal features of a closed joint-stock company. Decryption
This type of association has the right to distribute shares only among the founders or another circle of persons whose names are known to all participants, and their number should not be more than fifty. It does not have the right to proclaim an open subscription to its shares. The shareholders of such a company first of all have the right to purchase shares for themselves that are alienated by other participants. Such a society, for example, is VAD CJSC (the abbreviation stands for “High-Quality Roads”).
Legally signs of OAO
The number of its shareholders is not limited by law. Unlike a closed joint-stock company, shareholders can dispose of their shares without coordinating these actions with the rest of the participants. The company is allowed both closed and open subscription to its own shares. However, it is periodically (the deadlines set by the state in which the company is registered) obligated to publish information on the volume of its activities, namely to disclose all information about its annual reports, balance of losses and profits, as well as accounting.
Differences and general features: decoding of CJSC and LLC
The first, most important difference is that the charter capital of the LLC is represented by shares, and the CJSC, since it is a joint-stock community, is represented by shares.But both in a limited liability company and in a closed joint-stock company, the number of participants is always agreed upon in advance, and a unit, like a share, cannot be sold without obtaining the consent of other shareholders or shareholders.
Unlike an open joint-stock company, shares and units of both LLC and CJSC cannot appear on the state stock market. As a result, they do not have a market price precisely as a systematic characteristic, a price as a socially accepted unit. In this case, of course, you can set the price of a share or share in an individual unit transaction, but it will have a character no higher than a single value. A closed joint-stock company and LLC may change their status to open, but on the condition that the former must change its type of AO, and the latter must re-register as an AO.
Fundamental differences between JSC and CJSC
As already mentioned, in open joint-stock companies the number of shareholders is not limited by any framework, and in closed ones there should be no more than 50 participants. In an open joint-stock company, shareholders are free to dispose of their shares: to give, sell to any persons, and the owners of shares of a closed joint-stock company can put up for sale their shares, based on the fact that the shareholders will have preemptive rights. Closed joint-stock companies cannot distribute their shares among an unlimited number of buyers or through open subscription, only OJSCs have this right. The authorized capital of a CJSC starts at 100 minimum wages, and an OJSC starts at 1,000. The minimum wage is the minimum wage (verbatim transcript).
CJSC and OJSC are governed by a general meeting of shareholders, which meets annually. It usually solves such exemplary problems: approval of the auditor and various annual reports (accounting, loss and profit, etc.), election of the board of directors, election of the audit committee, and profit and loss from the activities of the joint-stock company are distributed over the entire financial year.
The essence of closed AO
As you have already noticed, the difference between a closed joint-stock company and a limited liability company is not so big, it consists only in the form of a security - a share or a share. Neither unit can be traded on the stock market. So, for example, the well-known CJSC VAD, the decoding of the name of which we gave above, in this area has the capabilities of no more than a company for installing windows. From this, the name “share” has a formal meaning for a closed joint-stock company, its security does not have the full range of functions that are assigned to the shares of a joint stock company.
The decoding of CJSC and OJSC differs only in the words “closed” and “open”, but the actual difference between them is much greater, especially if we take into account the enormous difference in the rights of their combined capital. One can even say with confidence that the LLC and the closed JSC from this position are much closer to each other than the closed and open JSC.
Why do you need a ZAO?
The exhaustive explanation here is one: the market feels the need for several levels of pooling of capital of various scales; therefore, in a modern economic society, an intermediate form between an LLC and a “true” public joint-stock company cannot be dispensed with.
We hope that a detailed transcript of a closed joint stock company, open joint stock company, limited liability company and a brief excursion on their main features, general features and differences introduced some new interesting facts into your knowledge in this area.
