Joint-stock companies are presently the most popular vehicle for foreign investors forming active business ventures in Russia, particularly if there is a Russian party involved. Joint-stock companies are the only type of Russian legal entity which may issue shares.
A joint-stock company is a company, whose charter capital is divided into a definite number of shares. The participants of the joint-stock company (the shareholders) are not liable under its obligations and take the risks, involved in the losses in connection with its activity, within the cost of the shares in their possession. A joint-stock company may be founded by one or more persons. The trade name of the joint-stock company must contain its name and the indication of the fact that the company is a joint-stock one.
Federal laws define the particular aspects of the formation, reorganization, liquidation, and the legal status of joint-stock companies in the spheres of banking.
Distinctions between Limited Liability Companies and Joint- Stock Companies.
| Joint - Limited Liability Company | Provision | Joint - Stock Company |
| Charter and constituent agreement | Constituent documents | Charter |
| Besides those set by law, addIiona1 rights and duties may be set by constituent documents | Rights and duties of shareholders (participants) | Set by law, additional rights and duties (not contradicting the law) may be set by the Charter |
| Possible at any time, with payment of the actual value of participatory share | Withdrawal from the company | Impossible |
| Possible with recourse to court, at appeal of participants possessing not less than 10% of participatory shares | Dismissal from the company | Impossible |
| Defined by constituent documents | Making additional contributions to assets | Impossible |
| May exist. Members of the executive body may not have over a quarter of positions | Board of directors | Compulsory if over 50 shareholders. Members of the executive body may not constitute the majority |
| Access to accounting documents | Participants’ right to information | Access to financial reports |
| Not required | Establishment of reserve fund | Compulsory |
| The law contains the extensive list of limitations | Limitation of the circulation of shares (stakes) (participatory shares (stakes)) | At closed joint-stock companies shareholders have the priority right to purchase shares At open joint-stock companies- free circulation |
| 1. At the company’s initiative: may not be done 2. Company is to purchase participatory share: a) If a prohibition to transfer the participatory share to the third parties exists in the Charter and participants refuse to acquire it b) If there is no consent in the Charter for transfer of the participatory share to a participant or to a third party c) In case of participant’s withdrawal or dismissal d) In case the contribution to the charter capital was not made in full | Participants alienating their shares (participatory shares) to the company | 1. At the company’s initiative: a) By the general meeting of shareholders’ decision on reducing charter capital b) By the decision of the board of directors, but not more than 10% of the charter capital 2. Company is to purchase shares by request of shareholders in case of Charter amendment that infringes the lawful rights of shareholders, if these shareholders did not vote or voted against the amendments: a) In case of reorganization b) In case of liquidation c) In case of the major transaction |
Vocabulary
accrue v нарастать
alienate v отчуждать
charter capital n уставный капитал
consumption cooperative n потребительский кооператив
derive v получать, извлекать (доход, прибыль)
dismissal n прекращение (дела); увольнение
entrepreneurial activity n предпринимательская деятельность
infringe the rights v нарушить права
participatory shares n акции, дающие право на участие в прибылях
proceeding from исходя из
provided that при условии, что
provision n условие
recourse to court обращение за помощью в суд
stipulate v обусловливать, оговаривать
vehicle nзд. средство
withdrawal from the company выход из компании
Reading tasks
Answer these questions.
1 How are legal entities divided?
2 What are commercial organizations?
3 What are non-commercial organizations?
4 What organizations do commercial legal entities include?
5 What are the names of non-commercial organizations?
6 What are the four characteristics of commercial organizations?
7 What are the main distinctions between commercial partnerships and companies?
8 What are joint-stock companies?
9 Which companies may issue shares?
10 Who may be a founder of a joint-stock company?
11 What is the role of Federal Laws in the operation of joint-stock companies?
12 What is a limited liability company?
13 What are the main distinctions between a limited liability company and a joint-stock company?
Language focus
A Adjective formation. Add the prefixes in-, ir-, il-, ab-, or un – to each of these words to form an opposite.
| 1 dependent 2 respective 3 likely 4 legal 5 normal | 6 limited 7 restricted 8 direct 9 formal 10 comparable |
B Match these words (1-8) with their opposites (a-h)
| 1 compulsory 2 asset 3 hostile 4oppose 5 purchase 6 consolidation 7 newly-formed 8 dissolution | a formation bdivision cpre-existing d approve e voluntary fliability gsale nfriendly |
Vocabulary tasks
Complete the sentences with the words and phrases from the box.
| privatization Federal Law charter registration association development property share contributions legal entities joint- stock companies establish |
1 One or more Russian or foreign ___________ and individuals may __________ a Russian legal entity.
2 The conversion of large enterprises into join- stock companies in the process of __________ have facilitated the __________ of investment and business activities in Russia.
3 A non- commercial legal entity executes its activities on the base of the _________.
4 The consumer cooperative is a voluntary __________ of individuals and legal entities. It is based on a membership and is aimed to satisfy the participants’ material and other needs by the way its members put together their __________.
5 The formation of a business entity in Russia, including __________ and limited liability companies, generally does not require the prior approval of any governmental entity.
6 The __________ of a legal entity is conducted in accordance with the Federal Law.
7 For all legal entities, except partnerships, a __________ must be presented for registration.
Over to you
You are going to interview the businessman who has recently founded a company about the requirements and documents necessary for company registration. What questions will you ask him?
Литература
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CONTENTS
Chapter VII CRIMES AND TORTS. 5
Unit 21 Crimes. 5
Unit 22 The Globalization of Deceit 33
Unit 23 Torts. 42
Unit 24 Punishment 51
Unit 25 Capital Punishment 64
Chapter VIII LEGAL PROFESSION.. 74
Unit 26 Professional Titles. 74
Unit 27 People in Law Cases in Great Britain. 86
Unit 28 Lawyers in the USA.. 94
Unit 29 Lawyers in Russia. 104
Chapter IX LEGAL EDUCATION.. 113
Unit 30 Legal Education in the UK.. 113
Unit 31 Legal Education in the USA.. 127
Unit 32 Career in the Law.. 139
Chapter X THE LAW IN PRACTICE.. 145
Unit 33 Law Firms. 145