How to open a Public Joint Stock Company in Russia

May, 08 2024


Registration of a Public Joint Stock Company is an important step for entrepreneurs who seek to attract investment and develop their business. Opening your own company with the issue of securities is a process which is more complicated than the registration of an LLC. To understand this issue, it is often necessary to seek the services of professional lawyers. In this article we will consider in detail all the nuances of opening a PJSC and the procedure.

Specifics of a Public Joint Stock Company

Public Joint Stock Company (PJSC) is an organisational and legal form of doing business, which involves dividing the authorised capital into shares and attracting investments through the open sale of shares

How does a PJSC differ from other forms of doing business, including non-public joint stock companies?

  • Public offering of shares. One of the key features of a PJSC is the possibility of public offering of shares on financial markets. This means that the company’s shares can be purchased by a wide range of investors, including individuals, institutional investors and other companies. This openness provides PJSCs with access to additional capital to finance their development.
  • Greater opportunities for growth and development. Due to access to capital through public offerings on the securities market, PJSC has great opportunities to expand its operations, acquire other companies, invest in new projects and develop new lines of business. This allows PJSC to compete effectively in the market and increase its share in various industries.
  • Transparency and mandatory reporting. Public joint stock companies are required to provide transparent and timely information about their operations, financial condition, development strategy and other important aspects of their business. This can be done through the publication of annual and quarterly reports, as well as information on key events and decisions taken at the general meeting of shareholders.
  • Democratic governance. PJSC is managed in accordance with the principles of democracy, where each shareholder has the right to vote in proportion to the number of shares he or she holds. The General Meeting of Shareholders acts as the supreme governing body that makes key decisions on the company’s operations, including the selection of the board of directors and approval of financial reports.
  • Strict regulation and supervision. PJSCs are subject to strict regulation and supervision by government and independent bodies – financial regulators and stock exchange commissions. This is aimed at protecting the interests of shareholders, ensuring compliance with the law and preventing fraud and abuse.

Advantages and disadvantages of Public Joint Stock Companies

The advantages of Public Joint Stock Companies include:  

  • Access to capital. PJSCs are able to raise large amounts of capital through public offerings on financial markets. This provides additional resources for implementing ambitious development and investment strategies.
  • Opportunities for growth and development. Thanks to a wide range of investors and access to capital, PJSC has great opportunities to expand its operations, acquire other companies, develop new business lines and raise its status.
  • Transparency. Public joint stock companies are obliged to provide transparent information about their activities and financial condition, as well as to implement democratic principles of governance. This increases the confidence of investors and the public.
  • Liquidity of shares. Securities of PJSCs are easier to sell on the open market compared to shares of closed companies, which provides shareholders with an opportunity to quickly dispose of their investments.

However, PJSC has certain disadvantages. The most important of them include:

  • Complex organisational structure. A PJSC requires a complex management structure and adherence to strict corporate rules. This can increase costs and complicate the decision-making process.
  • Public accountability. Public companies are subject to high public scrutiny and criticism, as well as strict regulation. This can create additional risks and constraints on the company’s operations.
  • Limited management control. PJSCs are managed in a democratic manner. This means that shareholders with fewer shares may have limited control over decision-making.
  • Ensuring transparency. Public companies are required to provide a wide range of information about their operations and financial condition, which can be costly in terms of money and time.
  • Risk management requirements. Due to increased regulatory and investor scrutiny, PJSCs must emphasise risk management and compliance, which can be challenging.
  • Little flexibility in governance: Public companies may find it difficult to make quick decisions because of the need to comply with corporate governance procedures and requirements.

How to open a PJSC: registration procedure 

To register a PJSC, the founder must go through several steps:

  1. Determine the amount of authorised capital. To register a PJSC, the minimum amount required is 100,000 roubles. However, the founder can determine any amount that is higher than this value.
  2. Prepare the founding documents. For registration with the Federal Tax Service, it is necessary to provide a comprehensive list of documents that are drawn up without a single error. Otherwise, the body may refuse to open a PJSC.
  3. Determine the number and par value of shares.
  4. Apply to the registering authority – the Federal Tax Service at the place of registration.
  5. Obtain the founding documents, including the certificate of registration of the PJSC.
  6. Organise a general meeting of shareholders. The first meeting is necessary to make decisions on the formation of management bodies and other important issues.
  7. Place shares on the market. The issue of shares should be registered with the authorised body regulating financial markets – the Central Bank of the Russian Federation.
  8. Conduct an initial public offering to attract investors.

What authorities should I apply to in order to register a PJSC?

When registering a PJSC, entrepreneurs must apply to several government agencies to obtain the necessary permits and documents to start the company’s operations. It is important to understand which authorities are responsible for various aspects of registration and how to interact with them. In general, this list includes:

  1. The Federal Tax Service (FTS) of Russia. The FTS is the first authority to contact for state registration of a PJSC. Entrepreneurs must submit an application and provide all necessary documents, including the charter of the PJSC and the minutes of the first meeting of the founders. The FNS also issues a certificate of state registration, confirming the legality and existence of the company.
  2. The Central Bank of Russia is the authorised body for regulating financial markets. For a PJSC planning to place shares on the securities market, it is necessary to apply to the authorised body for regulation of financial markets. This body registers the issue of shares and controls the activities of the PJSC on financial markets, ensuring compliance with the legislation and requirements of regulatory bodies.

Depending on the particular jurisdiction and the specifics of its activities, the founders of a PJSC may apply to other authorities and institutions. For example, PJSCs that want to operate in certain areas must obtain permits and licences from specialised regulatory bodies.

Who can open a PJSC?

A Public Joint Stock Company (PJSC) attracts the attention of entrepreneurs for various reasons. Firstly, opening a PJSC provides an opportunity to attract large investments through an open placement of shares on financial markets, which provides additional resources for business development. Secondly, a PJSC has great potential for growth and development due to access to capital and a wide range of investors.

There are no strict restrictions on founding persons to open a PJSC. PJSCs can be founded by individuals or legal entities, including foreign entrepreneurs. This makes PJSCs accessible to a wide range of individuals, which favours diversity of investors and business development.

Many entrepreneurs seeking global expansion of their business choose to open a PJSC as the optimal form of organisation. This is explained by the possibility of attracting international investors and creating a base for international business. For foreign entrepreneurs, a PJSC is a promising tool for entering new markets and expanding the geography of their business.

Individuals, along with companies, can initiate the creation of a PJSC, especially if they have ambitious plans for business development and are interested in using public offerings to raise capital. Thus, a PJSC can be created by both young entrepreneurs and experienced businessmen.


Opening a PJSC is an opportunity for entrepreneurs to attract investment through an open share offering. Undoubtedly, it promotes business growth and development. However, there are certain limitations and difficulties, including the need to comply with strict corporate governance and transparency requirements.

Citizens and legal entities, including foreign entrepreneurs, can open a PJSC. This creates broad prospects for business development and attracting international investment. This flexibility and accessibility of the form of organisation make PJSCs an attractive choice for different categories of entrepreneurs – from young start-ups to experienced businessmen seeking global growth.

It is imperative to consider the complexity of governance and regulation of PJSCs, as well as the high transparency and financial reporting requirements. It is important to carefully examine and evaluate all aspects of starting and managing a PJSC in order to make an informed decision and ensure successful development of the company in the long term.

Questions and answers

What information is a PJSC obliged to disclose?

All PJSCs are obliged to disclose information about their work through websites or periodic media publications. They publish the following documents:

– Annual reports
– Reports on financial and economic activities
– Decisions of management bodies or changes in the composition of major shareholders
– Auditor’s report
– Information on the company’s affiliates

What types of shares can PJSCs place?

PJSCs may place ordinary and preference shares. The latter are of one or several types. The final list depends on the type of shares. Ordinary shares give the right to participate in general meetings, receive dividends and part of the assets in case of liquidation. Holders of preference shares cannot vote at general meetings, but they receive such a right in certain cases.

How is the profit of a PJSC distributed? 

Income is distributed by decision of the general meeting of shareholders in the form of dividends. They are paid out of net profit based on the results of the reporting year.

Author of the article
How to open a Public Joint Stock Company in Russia
Valentina Khlavich
Managing Partner
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