Peculiarities of the procedure for opening a JSC

Contents:

• Peculiarities of legislative regulation
• How to open a JSC: stages
• Stage 1: Determine the organisational structure
• Step 2: Selection of the taxation system
• Step 3. Selection of the legal address
• Step 4: Development of the JSC charter and approval of the decision on its establishment
• Step 5: Registration
• Step 6: Changing the structure of the organisation, if necessary

Registration of a JSC (now – PJSC) is the process of opening a company from scratch, including registration with the state authority. The process includes data on the founders of the organisation, the location of the JSC, the person acting without a power of attorney on behalf of the company and the registrar. The process consists of preparing and submitting properly executed documents in accordance with the requirements of the legislation of the Russian Federation.

Peculiarities of legislative regulation

Since 1 September 2014, Russian legislation abolished the concept of JSC and introduced the term Public Joint Stock Company (PJSC). In order for a non-public joint stock company to acquire public status, the organisation needs to operate for at least two years and then apply to the registration authority for a change of form. This usually happens at the last stage.

In general, the process of establishing a PAO begins with the registration of a JSC. The procedure involves several stages, each of which requires compliance with the regulations established by the legislation of the Russian Federation. If these requirements are violated, the registration of a PAO may be rejected, which will require the process to be repeated.

How to open a JSC: stages

Stage 1: Determine the organisational structure

The founder should competently approach the issue of selecting the management team. It is important to check the candidates in the list of disqualified persons or persons who have restrictions on participation in legal entities. Otherwise, registration may be refused.

If the list is formed, it is important to choose a registrar. The decision is approved when the JSC is created. The issuer must sign an agreement with the registering authority.

Step 2: Selection of the taxation system

It is chosen by the founder independently. The choice is between simplified (STS) and basic (BST). The general system of taxation is imposed automatically, for simplified it is necessary to separately submit an application for application of the simplified taxation system. Next, it is necessary to establish the location of the JSC.  

Step 3. Selection of the legal address

The address is indicated in the decision and the charter of the JSC. However, documents on the lease or purchase of premises are necessary, as they will help to avoid the risk of refusal to register the JSC in connection with the mass of the address. The documents may be a letter of guarantee, a copy of the ownership document.  

Step 4: Development of the JSC charter and approval of the decision on its establishment

According to the current legislation, the charter must include the following information:  

• Full name of the JSC
• Location of the company
• Form of the company
• Number and total value of shares to be placed by the company
• Rights and obligations of shareholders
• Data on the amount of the authorised capital (for JSC – 100 000 roubles or more)
• Competences of each management body

It is important to have a resolution or minutes on the establishment of a joint stock company. The type of document depends on the number of founders. If there is only one founder, a resolution is drawn up, if there are several – it is adopted by voting and drawn up in the form of a protocol.

Step 5: Registration

The application must be drawn up in the form P11001. The template should include several sections for entering key information. It is also necessary to pay the state duty for registration – 4,000 rubles. This may be waived if the documents are submitted electronically using a highly qualified fee.

The documents for registration of a JSC are as follows:

• Articles of Association in two copies
• Decision or protocol on the establishment of the company
• If the simplified taxation system is chosen, an application for transfer to the simplified taxation system.  
• Application for registration in the form P11001
• Fee payment cheque
• Documents on the right to use the legal address
• Original passport  
• Notarised power of attorney, if the documents are submitted by third parties
• Documents on issuance of shares

All the above documents must be submitted to the tax office, filled out without errors.

Step 6: Changing the structure of the organisation, if necessary

A non-public joint-stock company can be transformed into a JSC. For this purpose, the company must operate with profit for 2 years. To carry out the reorganisation, it is necessary to specify in the company’s charter the information about the transition to the public mode, to make additional clauses that will help to take into account all the legislative nuances relevant for public companies.

The next steps are thoughtful interaction with the stock exchange and entering into a contract to allow the shares to be traded on their platform. Then it is necessary to register a share prospectus. This document emphasises the importance of each security and describes in detail the company’s features and its economics.

After each of these steps, information about the company’s transition to the public company regime must be officially recorded in the Unified State Register of Legal Entities.

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