Articles Of Association
A joint stock company is a company in which the share capital is divided into a certain number of shares. The liability of the shareholders for the debts and losses of the company is limited to their share of the paid up share capital incorporation templates.
There are two legal forms of a joint stock company: closed joint stock company (ZAO) and open joint stock company (OAO). In English a joint abbreviation JSC is often used. The main difference between them is that the shareholders of a closed joint stock company have the right of first refusal to purchase the shares of the company in case such shares are sold by another shareholder to a party that is not a shareholder of the company.
Both physical and legal persons may act as founders of a company. The number of founders of a closed joint stock company cannot exceed 50. For establishing a Russian resident company a foreign legal entity is not required to have any permits or licenses issued by the Russian state authorities or other organizations.
Constituent Meeting The founders shall decide on establishing a company at a constituent meeting. In case of only one founder the Resolution mentioned above should include this information. The constituent meeting shall make the following decisions:
* establish the company
* approve the articles of association
* approve the valuation of the property or property rights to be invested into the share capital (if the share capital is to be paid in kind)
* elect the management bodies. Founding Agreement The founders of a joint stock company shall conclude a written agreement on establishment of the company which stipulates how joint activity related to establishment of the company shall be carried out, the amount of the share capital, categories and types of shares to be given to the founders, amount and method of payment of the shares and rights and obligations of the founders when establishing a joint stock company. The founding agreement is an agreement on joint activity. It is required for establishment of the company only and becomes redundant from the moment of the state registration of the company. The Articles of Association The articles of association of a joint stock company shall include the following main provisions:
* Full and abbreviated firm's name
* Domicile of the company (the domicile of the company determines the place of its state registration)
* Type (closed or open)
* Number, nominal value and category of shares
* Shareholders' rights
* Amount of share capital and how it shall be paid for
* Structure and powers of the management bodies and order of their decision making
* Order of preparation and holding of general shareholders' meetings
* Information on branch and representative offices (if any)
* Order of liquidation
* Some other provisions set forth by the law. In addition a joint stock company with foreign capital is required to have provisions on the following issues in its articles of association. * Field of activities of the company
* Shareholders names and the number of shares they own
* Decisions of the shareholders' meeting requiring unanimous vote. The articles of association may include also other provisions provided they do not contradict the Russian laws. It should be noted that the articles of association are the main document in which provisions governing the rights and obligations of the shareholders are included instead of, for example, a separate shareholders' agreement.
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