In Russia, commercial enterprises with a form of managing as joint stock companies are widespread. Until 2014, these entities were divided into closed and open joint-stock companies, but now they are designated according to the principle of publicity. This article will examine the main differences between these types of organizations.
Definition
To begin with, what is a joint stock company? This concept designates commercial organizations whose capital is divided into shares - shares. These assets attest to their participants obligations under the management and organization of the company. Interest holders or shareholders may suffer some losses or, conversely, receive a certain income, in accordance with how many shares they have available.
Specifications
As a legal entity, a joint stock company has several distinctive characteristics:
- The authorized capital of the enterprise is formed from the funds (contributions) of the participants.
- The liability of shareholders on property is distributed according to the volume of their contributions.
- The capital of the joint-stock company is divided into a specific number of assets - shares, which are exchanged at their nominal value. Shares are at the disposal of participants, not the entire enterprise.
Types of joint stock companies
Here are the definitions of a closed and open joint stock company. So, an open or public company is a company in which the founders are a certain, limited number of persons, but outsiders can also be the owners of the assets of this organization.
Almost everyone can buy shares in the company and receive dividends, if the form of management is open. The shareholder also has the right to alienate assets to third parties. However, they do not need to ask for consent from other shareholders.
For the forms of joint-stock companies, the provision of information on the activities of the company for the current reporting period is mandatory. This information is published in the public domain, so that investors can familiarize themselves with the reporting of the enterprise via the Internet, the media and other sources.
Closed or non-public companies of shareholders are also commercial organizations whose fund is divided into securities in the form of shares. The difference of a closed company is that its stock capital is distributed only between the founders, that is, the individuals who formed the company. In addition, in organizations of closed forms, third parties cannot acquire their shares.
If a person decides to leave the circle of shareholders, he has the right to sell his assets, but only to persons from the founders of the organization. By the way, a certain advantage of non-public society is the optional reporting of information in the media.
Why are AOs created?
The main mission of joint-stock companies (closed and open), as commercial enterprises, is to make profit (dividends). For AO, there are many areas for doing business. So, an enterprise can engage in any type of activity, if this does not contradict Russian legislation. It should be noted that some industries may require a special permit (license): medicine, insurance, professional activities in the securities market and others.
Often the form of managing an organization as a joint-stock company is created for long-term projects - the construction of a large object, for example, an oil pipeline.
The term of activity of the joint-stock company is not limited, unless otherwise specified in the Charter document. Also, the number of company shareholders is not limited, of course, if its form is open. For a closed organization of shareholders, there can be no more than 50.
Company specifics
Among the characteristic features of open and closed joint-stock companies, the main one is the ability to transfer own investment assets to other individuals and / or legal entities.
Open companies, as a rule, are formed when managing large enterprises in the business sector with large capital, which require large investors. However, when there is a need to hold meetings of founders, it is not easy to assemble everyone, since the total number of shareholders can be estimated in thousands of people and even more.
What is the difference between an open joint-stock company and a closed one? For a non-public company, which are designed for no more than 50 shareholders, more freedom is provided in managing the organization, as opposed to public business forms. For example, the administration of a company may be completely transferred to the board of directors or other governing bodies of this business.
The meeting of shareholders of closed companies independently resolves many issues of the organization, for example: the value of assets - their face value, total amount, the provision of additional rights to individual investors, and others.
What laws govern the activities of AO?
Legislative joint-stock companies of open and closed type are regulated by the Civil Code, in particular, article No. 66.3.
Also, the main federal law governing the activities of these forms of business is the Law on Joint Stock Companies 208-FZ.
Innovations in the Russian legislation on the forms of joint-stock companies
In September 2014, an updated version of the Civil Code of Russia entered into force. In the new edition, the forms of legal entities were divided, for example, into unitary and commercial, and some forms of organization of enterprises were excluded (a company with additional responsibility). In particular, joint-stock companies of open and closed type began to be designated as public and non-public.
So, AOs are public if:
- shares of the company or securities that are exchanged for shares are published in the public domain;
- the turnover of the company's shares is carried out in accordance with the Russian legislation governing securities.
If the above criteria are not taken into account by the organization, but the name and charter indicate that the company is in a public form of organization, then the rules of public companies apply to it (article 66.3 of the Civil Code of the Russian Federation).
If the organizational form of the enterprise is a limited liability company, then all of them can only be non-public.
The difference between an open and a closed joint-stock company is that the indication of the "openness" of the company should be both in the charter and in the official name. For example, if the institution was non-public, but further plans to place assets in the public domain, it is necessary to make these adjustments to the company's charter and its name. Accordingly, the form of managing the company will be listed as public, or PAO.
If the company is closed, then it is enough to add this paragraph to the charter - in the company name the interpretation "non-public joint-stock company" may not be indicated.
Comparison of non-public organization forms and limited liability companies
What are the similarities and differences between open and closed joint stock companies? We can say that closed, non-public forms of organization are a cross between PAO and LLC:
- The authorized capital or capital of a closed-form company is divided into shares, unlike LLC. In limited liability companies, the fund of the company is divided into shares.
- The similarity of non-public companies with LLC is expressed in their limited liability. So, the number of participants - owners of shares / units is limited, and the resale of assets is not carried out without the consent of all founders.
- When a public joint-stock company is formed, the entire capital of the enterprise begins to bid on the stock markets, to apply. In contrast, LLCs and closed companies are not used on exchanges, so they have no market value. However, an approximate price for shares and / or shares can be obtained if it is necessary to conclude, for example, a one-time contract.
- Organizations with the form of managing as LLC or non-public companies can be transformed into public (open). However, if limited liability companies only need to re-register, non-public companies will need to completely change the type of company.
LLC or closed joint-stock company?
Thus, the main difference between an LLC and a non-public company is only formally - it is either a charter fund formed from the investment shares of the founders, as in the first case, or from another equivalent of securities - shares. However, what are the shares of open and closed joint stock companies?
First of all, this is a tool for investing, which involves an active increment in the stock markets, fluctuations in the exchange rate, quotations and so on. While shares as securities of another type may consist of shares of not one, but several companies. Therefore, joint stock companies are more likely to form public, open companies that will operate and circulate on the stock market.
Liquidation
How to close a joint stock company of open or closed type? Cessation of activity - this is the liquidation of a legal entity as an independent market element. AO may also stop activities in connection with the transformation.
Upon termination of activity, the organization may be liquidated voluntarily or forcibly. Voluntary is the liquidation of a joint stock company by a decision adopted at a general meeting of shareholders. Compulsory liquidation is the result of a court decision or, as indicated in the economy, an expression of the will of the market.
The company is considered liquidated after the state registration body makes the appropriate mark in the register of legal entities.
Grounds and stages of liquidation
Grounds for liquidation by force:
- The activities of the organization are carried out without a license / permit.
- The legislation does not provide for or prohibits the type of activity of the company.
- Violations or non-compliance by the organization with laws and regulations, if they are detrimental to the interests of the shareholders of the company or are irreparable.
- A recognition of the organization insolvent as a result of a court decision.
In contrast to the forced termination of activity, the process of liquidation of a company on a voluntary basis consists of several stages:
- Adoption of a collegial decision on liquidation at a general joint stock meeting.
- Providing information on termination of activities to state registration authorities within three days after the organization makes a decision.
- Appointment of the liquidation commission after the approval of the state body. If a government agency is included in the company's shareholders, their representative must be present on the commission.
- The commission reviews the organization for revealing debts on loans and other loans; an interim liquidation balance sheet is drawn up.
- In the absence of creditors' requirements, the final balance sheet is approved and assets are distributed among the shareholders of the organization.
Key Features of Society Types
Thus, we list the main differences between an open and a closed joint-stock company:
- Assets are distributed in a public joint-stock company through open subscription, that is, an unlimited number of investors. In closed institutions, the circle of persons - shareholders - is predetermined.
- The statutory fund of a public company starts from 100 thousand rubles, and non-public - from 10 thousand rubles.
- The number of shareholders for open companies is not limited. For non-public joint-stock companies, the number of shareholders may not exceed 50 persons.
- The company name of an open society institution states that it is public.
- Closed-type shares of institutions are not placed on stock exchanges.
Conclusion
Due to changes in the Civil Code, since 2014, the definition of a joint stock company of open and closed type is no longer used. The current version of the code of the company is divided into public and non-public. If the institution was closed, the word "closed" should be deleted from the name. So, the absence of a reference to publicity is a sign of a non-public society, that is, just an AO.
As for business status, it can be said that non-public joint-stock companies are less interesting to investors. Stocks, as first of all goods that are traded on exchange markets, are more suitable for public forms of management and are most suitable for business partnerships and transactions.