On September 1, 2014, a new state reform was implemented. The legislator divides all societies into public and non-public. The main factor influencing the differentiation was the fact of involving an unlimited number of investors in the turnover of shares. If the shares are placed by public subscription, they are listed on the stock exchange, then the organization is considered public, if not, non-public. Such changes in legislation were necessary for the legal regulation of their activities. We will consider the essence of the concept, the peculiarities of opening, the specifics of the work of public joint-stock companies and we will answer the urgent question for entrepreneurs: “PAO - what is it?”.
What is a PAO?
On September 1, 2014, amendments to the Civil Code concerning the activities of legal entities entered into force. This date marks the liquidation of CJSC, LLC and the beginning of the work of new organizational forms of doing business - PJSC (transcript: public joint-stock companies), AO, LLC (non-public joint-stock companies).
Prior to legislative changes, large corporations and small organizations worked under a single legal regulation scheme. If a small organization even had two shareholders, the management was obliged to transfer authority by creating a board of directors or by organizing a meeting of shareholders on time, choose an auditor who, in fact, controls his actions and protects interests. The amendments improved the law and leveled the need for organizations to comply with its requirements only formally due to global discrepancies between legal and economic models.
Basic differences between PAO and AO
Title | PAO | AO |
Method of placement of shares | Securities are converted by open subscription and publicly traded in accordance with the law. | Closed subscription, shares and securities are not publicly traded |
Maintaining the register of shareholders | Required to provide | Not required |
Who confirms decision making | Register holder | Registrar or notary |
Alienation of shares | It is impossible to provide for the possibility of alienation of a share | The charter may provide for a provision on the disposal of shares |
Preemptive acquisition of shares | It is impossible | Allowed |
More stringent requirements for PJSC are due to the need for strict protection of the rights of a large number of investors. But AO has a wider selection of management mechanisms.
PAO: discovery. Algorithm
1. The business case for a business plan.
2. Organization of a public joint stock company.
After the decision to establish a public joint stock company at the constituent assembly or individually, the shareholders enter into a written agreement.
3. Conclusion of a foundation agreement.
It will regulate the activities of the company, the size of the authorized capital, types of securities, the procedure for their payment, rights and obligations of the parties.
4. State registration of the PAO.
What is this process and what are its goals? The company is registered by the Inspectorate of the Federal Tax Service of the Russian Federation, guided by the Federal Law of March 21, 2002 N 31-. A state fee is required for the service, details must be specified in the selected inspection department. Registration is necessary for conducting legal activities and state control. The founder must prepare the following documents:
- statement;
- 2 original articles of association;
- foundation agreement, protocol;
- payment order, receipt of payment of duty;
- documents to the legal address (notarized copy of the certificate of ownership, letter of guarantee of the owner of the premises where the company will be registered).
How to register shares of a public company
A separate nuance is the registration of the issue of shares of PJSC Russia. The founder needs to prepare additional papers to legitimize them. They must be submitted within a month from the date of state registration of the company. Otherwise, you will have to pay a fine in the amount of 700 thousand rubles. This procedure is also followed in case of increase in the authorized capital, additional issue of shares, attraction of third parties, reorganization of the company.
OJSC, PJSC do not mean different organizations, the goals of their activities have not changed, only its format has changed. CJSC, OJSC were reformed into public, non-public companies, limited liability companies (LLC) in order to improve their work models.
Opening a branch of PAO. What does this provide
Article 51 of the chapter of Federal Law No. 208-FZ as amended on June 29, 2015 “On Joint-Stock Companies” gives him the right to create representative offices and branches, being guided by the Civil Code of the Russian Federation and federal laws. The branch of PJSC is its full-fledged independent branch and operates on the basis of a legal power of attorney.
Features of the activities of public joint stock companies
- The number of shareholders is not limited.
- Shares are traded publicly and without restrictions on the market.
- The authorized capital is formed by the issuance of securities (shares), the minimum size is 100,000 p.
- There is no need to deposit funds in the authorized capital before the registration of the company.
- Responsible for obligations with its property (but not in the case of obligations of shareholders of PJSC). Opening a company automatically gives shareholders rights and obligations.
- Important information about the company’s activities is publicly available (report data, financial statements, charter, decision on the issue of shares).
Work organization
The management links are in the hands of the general meeting of shareholders, but it cannot consider issues and approve decisions that are beyond its competence (a list of issues regarding which decisions can be made is fixed in the Federal Law “On Joint-Stock Companies”). Current activities are controlled by the executive body - the general director, board, directorate. He reports to the board of directors regarding the activities of the company. The latter should choose a company auditor to conduct and control the financial and business segment. The general meeting of shareholders is mandatory to be called once a year. Although PJSC and PJSC underwent reorganization and innovations in the legal segment, they largely retained the registration and operation algorithm.
The amendment of the Civil Code on September 1, 2014 allowed the creation of a legal model that meets the real needs of entrepreneurs. One of the most convenient and effective forms of organization of the company is considered PAO. Decoding reflects the essence of its activities. This is a public (open) joint stock company. An objective answer to the question "PAO - what is it?" It will provide an opportunity not only to organize a successful enterprise, but also to correctly determine your business segment.