Non-public joint stock company: what do you need to know about the closed form of JSC?

Feb, 07 2024


A non–public joint-stock company is a form of business organization that differs from a public joint-stock company (PJSC) in a number of key features. Thus, the Company’s shares are not traded on stock exchanges and do not provide public access to a wide range of investors. We will tell you what details you need to take into account when opening an account in this article.

The structure of the NJSC

One of the main features of the NAO is the limited number of shareholders. According to Russian law, an NJSC cannot have a greater number of shareholders than the number prescribed in the articles of association. This creates a narrower stock cycle and limits the participation of new investors in the company.

NJSC is obliged to adhere to the same principles of corporate governance as PJSC, but taking into account the specifics of its structure. The management bodies of the NJSC are the general meeting of shareholders and the executive body is the CEO. The duties and rights of shareholders are determined by the legislation and the articles of association of the company.

Non-public joint-stock companies can manage their affairs more flexibly, since decisions can be made with fewer stakeholders. However, they are limited in their ability to raise capital because they do not have access to the financial market.

It is also required to provide reporting to shareholders, maintain transparency of its activities and comply with legal requirements on corporate governance. However, the level of mandatory reporting and the degree of disclosure of information is usually lower than that of PJSC.

NJSC differences from other joint stock companies

  • In the modern Russian corporate governance system, a non-public joint stock company is a unique form of business organization that has a number of distinctive features that make it attractive to certain companies and investors. What features are important to note?A limited number of shareholders. This allows the company to always act in its own interests and frees it from having to take into account the opinions of third parties.
  • Lack of circulation on stock exchanges. Unlike PJSC, NJSC do not trade their shares on stock exchanges. This means that the company’s shares are not in open circulation, which limits liquidity, but reduces the impact of external market factors on the value of shares.
  • Flexibility in management. Due to its limited number of shareholders, NJSC often has more flexibility in management. Strategic decision-making can be carried out faster because the number of stakeholders is limited, which ensures more operational management processes.
  • Limited opportunities to raise capital. An important feature of the NJSC is the limited possibilities of raising capital. The lack of circulation on the stock exchange narrows access to financial resources. Companies may face limited options to attract new investors.

Features of the turnover of NAO shares

Within the N, there is a peculiarity in the turnover of shares, determined by the absence of their circulation on stock exchanges. It creates unique conditions for stockholders, since securities cannot be freely sold or purchased on the open market. Thus, the process of transferring shares requires the consent of other shareholders and may be limited by the company’s articles of association.

Such a restriction is aimed at maintaining the stability of ownership and preventing unauthorized changes in the shareholder structure. In this case, the NJSC Charter plays a key role in regulating the transfer of shares, defining the principles and restrictions that must be observed in transactions with the company’s securities. This provides an additional level of control and sustainability within society.

The peculiarity of the NAO in limiting the turnover of shares and their resale to third parties is a key point that affects the dynamics of ownership and the company’s development strategy. This ensures a more stable and controlled structural formation of shareholders.

The role and types of capital

Capital plays a key role in the NATO structure, determining the financial stability and capabilities of the company. Various types of capital in the NAO interact in a balanced manner, providing not only current operational needs, but also prospects for future development.

The types of capital are as follows:

  • Share capital. The authorized capital is the main type of capital, which is defined by the charter of the NAO at its creation. It represents the amount for which the shares are issued. It serves as the financial basis for the functioning of the company. The authorized capital cannot be changed without a corresponding decision of the general meeting of Shareholders, which ensures the stability of the financial structure.
  • Additional capital. It represents funds raised on the basis of over the authorized capital. It may arise due to the issue of additional shares or the attraction of borrowed funds. Additional capital plays an important role in financing new projects, expanding business and increasing investment attractiveness.
  • Reserve capital. It represents financial resources set aside by the company to cover possible losses or emergency situations. This type increases the NAO’s financial stability by providing financial support during periods of economic instability or unexpected costs.

Opening of the capital of the NAO

A non-public joint-stock company may be opened by a founder, a group of founders, or a legal entity. In any of these cases, it is important to follow the following steps:

  • Preparation of documents.
  • The meeting of the constituent assembly, at which a decision on the opening of the company should be made.
  • Collection of necessary documentation and their submission to the Federal Tax Service.
  • Formation of the authorized capital and issue of shares.

At the preparatory stage, it is important to come up with a company name and choose a legal address. Next, the founders must decide on the tax system. It is important to note here that NAO can operate in the same modes as LLC – general, “simplified” and others.

At the constituent meeting, the future shareholders decide on the establishment of the company. It also adopts the text of the company’s charter and signs an agreement on the establishment of the company. If there is only one founder, then the contract is not needed.

To submit to the tax service, you need to collect the following set of documents:  

  • * The decision on the establishment IS NECESSARY.
  • The Charter of the NAO.
  • Payment document for payment of the state fee – 4000 rubles.
  • * Application for registration of a legal entity in the form P11001.
  • Documents confirming the legal address of the company. This may be an extract from the Unified State Register of Property Rights or a lease agreement.

Documents can be submitted independently, through a third party (after notarization of the power of attorney) or through the electronic service of the tax service. To do this, you need to sign the documents with an electronic digital signature.  Within three days, the tax service will decide on the opening of a new office or issue a refusal. If the decision is positive, then at the next stage you can open a bank account and register with the SFR for reporting.

It is important not to forget about the formation of the authorized capital and the issue of securities. To do this, a package of documents must be submitted to the Central Bank, including the shareholders’ decision on the establishment of the company and a document with the terms of issue and the value of shares.

What provisions are included in the charter of the NAO

The following provisions may be included in the charter of a non-public company by a decision of the NAO participants, adopted unanimously:

  • Regulations on the transfer to the consideration of the collegial management body of the company or the collegial executive body of the company of issues referred by law to the competence of the general meeting. The General Meeting may not assume the powers listed in subparagraph 1 of paragraph 3 of Article 66.3 of the Civil Code of the Russian Federation – on liquidation and reorganization of the company and other provisions.
  • That the functions of the collegial executive body are assigned to the board of directors or another body. If the company refuses to create such a body, then this is also fixed by the charter.
  • Provisions on the transfer to the sole executive body of the company of the functions of the collegial executive body of the company.
  • Provisions on the absence of an audit commission in the NAO or on its creation in cases provided for by the company’s charter.
  • On the decision-making procedure, on holding a general meeting or absentee voting of the company’s participants. The procedure for preparing and holding a meeting of the general meeting or absentee voting of the company’s participants is also fixed. It is also important to fix the procedure for making decisions of the general meeting, if such changes do not deprive the NAO participants of the right to participate in a meeting of the general meeting of the company or in absentee voting and to receive data about them.
  • Provision on requirements that differ from the legal norms regarding the number of participants.
  • Regulations on the procedure for exercising the pre-emptive right to purchase shares placed by a joint-stock company or securities convertible into its shares.
  • Provisions on the assignment to the competence of the general Meeting of Shareholders of issues not related to it in accordance with the Civil Code of the Russian Federation or the Law on Joint Stock Companies.

The nuances of the NAO’s work

The law does not prohibit such a company from being owned by only one person. However, the management team must include at least 2 people. The maximum number for the board of directors who own shares is 50 people. If this number is exceeded by at least one person, then the company must restructure, creating a production cooperative based on the company. It is also possible to re-qualify an NAO into an LLC.

In general, the NAO can work in any direction – to produce products, trade, provide various services to the public or legal entities. It is important that before registration, a representative is selected who will be responsible for the formation of the authorized capital.

Any NAO must have a unique name, which will be reflected in the registration documents. When filling out the registration form, all the established rules must be observed. Making an error may cause the registration authority to refuse to accept documents. It should also be said that a fully completed application must be certified by a notary office.

How is the disclosure of information about the work of the NAO

When registering, each founder of a joint-stock company is faced with the question of how to disclose information about work on the Company? Explanations are contained in Article 3 of Federal Law No. 99-FL of 05.05.2014. The rules apply to the company regardless of the provisions of the charter in the field of data disclosure.

According to the norms of the law, the NAO is obliged to disclose information if the number of shareholders exceeds the value of 50 people. Information must also be disclosed if the company has publicly placed securities on the stock exchange other than those that are converted into shares.  

Under certain conditions, a non-public JSC, which is obliged to disclose information, may apply to the territorial authority of the Bank of Russia for exemption from this obligation. To do this, you need to submit an application and documents confirming compliance with the conditions for release.


A non-public Joint Stock Company is a special form of business organization. An important feature is the lack of circulation of its shares on stock exchanges, which limits the liquidity of securities and creates conditions for the impossibility of free resale of shares to third parties without the consent of other shareholders.

There are three types of NAO capital. The authorized capital determined at the creation of the company serves as the main financial basis. Additional capital, which can be raised through the issuance of additional shares or borrowed funds, provides opportunities for the growth and development of the company. The reserve capital set aside for possible coverage of losses or emergency situations increases the financial stability of the NAO.

As a result, the NAO is a structure with certain limitations. At the same time, the NAO is able to provide stability of ownership and flexibility in management. Different types of capital, interacting with each other, create a stable financial base. This provides the company with an opportunity for effective functioning and development in the long term.

Question and answer

What nuances are associated with the opening of the NAO?

When opening a NAO, it is important to know the following:

  • Since September 1, 2014, the Non-public Joint Stock Company has been replaced by CJSC.
  • NAO shares are not listed on the stock exchange. This means that the free sale and purchase is severely limited.
  • All information about the work and management bodies of the NAO is contained in the charter.
  • The opening of the NAO ends with the issue of shares. Without this, society will not be able to work fully.
What nuances are associated with the opening of the NAO?

The opening and operation of the NAO must comply with certain criteria, among which the following can be noted:

  • The minimum amount of authorized capital for an NAO is set by analogy with an LLC – 10,000 rubles. It is important to understand that you do not need to deposit the entire amount of capital during registration. It is possible to split this amount into parts. However, 90 days after registration, at least 50% of the amount must be in the account.
  • The company's shares cannot be placed on the stock exchange for open sale. This is a violation of the charter and the law.
  • To sell shares to a third party, it is necessary to collect permits with all
Author of the article
Non-public joint stock company: what do you need to know about the closed form of JSC?
Valentina Khlavich
Managing Partner
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