Joint-stock company registration
If you plan on starting your own company in the big business, staying as an individual entrepreneur or LLC will somehow limit your abilities. In this case, you should establish a joint-stock company. It is the form of engagement in which the authorized capital is divided into shares that have equal asset value. Still, the liability of such association for their obligations are limited to its property, and for shareholders, the risk of losses related to such association’s activity is confined to the cost of their shares, except for cases defined by law.
The advantages of conducting business as a joint-stock company include the ability to raise unlimited funds by making contributions into share capital. Moreover, such contributions might be made both by the founders and by third parties.
Other advantages of joint-stock companies include:
• Ability to attract investments;
• Ability to receive dividends;
• Share ownership gives the right to claim part of joint-stock company’s property in case of its liquidation;
• Opportunity for holders of ordinary shares to participate in the company’s management;
• Besides other assets shares may be used in any activity of their owner including providing them as collateral;
• Shareholders are not responsible for joint-stock company’s liabilities but only for its activity to the value of shares they own;
• The responsibility of a joint-stock company for its liabilities is limited to its property;
• In case of success, the market value of the company’s shares might exceed its nominal value significantly.
The share capital of a joint-stock company must be at least 1250 minimum wages while the minimum wage level shall be valid at the moment of company’s establishment (registration).
There are two types of joint-stock companies: public and private.
A joint-stock company as any other legal person is considered as established at the moment of State registration in accordance with the law.
In order to establish a joint-stock company, its founders have to hold a private placement of shares and constituent assembly and proceed with the State registration.
Stages of the registration of a joint-stock company:
1) Founders decide to establish a joint-stock company and hold a private placement of shares;
2) Applying to the State Commission for Securities and Stock Market (CSSSM) with the registration of share issuing.
3) Registration of share issuing at SCSSM and providing an appropriate temporary certificate.
4) Assigning an international identification number of securities to the shares;
5) The signing of an agreement on servicing the issue of shares with a state institution defined by law, which carries out depositary activities;
6) Closed (private) placement of shares among the founders of the company;
7) Payment of the full value of shares by the founders;
8) The company’s constituent assembly approves the results of actions taken at stage 6, as well as the company’s constituent documents (charter);
9) State registration of the company;
10) The SCSSM registers the report on the results of a closed (private) placement of shares;
11) Presentation of the Certificate of registration of a share issue;
12) Founders of the company obtain title documents for shares.