A joint stock company (JSC) is an enterprise whose authorized capital is subdivided into a number of shares. Each of these parts is presented in the form of a security (stock). Shareholders (members of a joint stock company) should not be liable for the obligations of the enterprise. Moreover, they may suffer the risk of losses within the boundaries of the value of shares owned by them.
The essence of AO
A joint-stock company is an association that can be either closed or open. So, the shares of an open joint stock company are transferred to other persons without the consent of the shareholders. A CJSC shares (closed form of joint stock company) can be distributed only between its founders or other persons agreed in advance.
Establishment of an enterprise
AO is an entity based on an agreement on its creation. This document is called a memorandum of association. It is an agreement on joint activities aimed at creating a society. It ceases to be valid only after the registration of this company as a legal entity. Then another constituent agreement is drawn up - the charter.
The supreme management body of the joint-stock company is the general meeting of shareholders. The executive body of such a company can be either collegial (in the form of a board or directorate), or sole (for example, in the person of the general director). If the company has more than 50 shareholders, then a supervisory board should be created.
A company is assigned the status of a subsidiary, if it depends on the parent company or partnership.
A joint-stock company is an enterprise in which the authorized capital is divided into a number of shares. In this case, the founders (shareholders) should not be liable for obligations, but they may incur losses in the process of carrying out the activities of the enterprise in the amount of the value of shares owned by them.
It is necessary to take into account the fact that in case of incomplete payment by the founders of their shares, they should be jointly and severally liable for all obligations of the joint-stock company with regard to the unpaid value of the shares belonging to them.
The company name of the joint-stock company is the name with the obligatory indication of its joint-stock company.
Types of joint stock companies
This type of enterprise can be divided into two main types:
- An open joint-stock company is a company whose shareholders have the right to alienate shares owned by them without the consent of other shareholders. This JSC holds an open subscription to the shares issued by it. At the same time, this enterprise must publish annual reports for general familiarization every year.
- Closed joint-stock company - a company whose shares are to be distributed among the founders or a certain circle of persons. The authorized capital of an JSC is the shares distributed among them.
Package of constituent documents
The enterprise of the form of ownership in question is created both by several persons and by one citizen. If the founder has acquired all the shares of the enterprise, then he goes through the documents as one person. The charter of a joint-stock company is a document that contains information about the name of the company and its location, about the rights of shareholders and the procedure for managing the activities of a joint-stock company.
Founders have a joint liability for those obligations that arose even before its registration. The company is responsible for the obligations of shareholders that are associated with its creation, subject to the approval of the general meeting of the founders.
The charter is that constituent document which is approved by shareholders and contains certain information. AO property is the investments of the founders, which are fixed by the relevant agreement, which does not apply to the package of constituent documents. This agreement contains information regarding the procedure for organizing activities by shareholders to create an enterprise, the amount of the authorized capital of the company, types of shares and the procedure for their placement.
The essence of the authorized capital
Authorized capital is a kind of food for AO. What is it, consider in more detail.
The authorized capital of the company is represented by the total nominal value of the shares of the enterprise, which were acquired by the founders with the definition of the minimum size of the property of the enterprise. In this case, the interests of all creditors of the company must be guaranteed. The release of the founder from the obligation to pay for shares (even when it comes to offsetting claims) is not allowed. It is necessary to take into account the fact that when creating an AO, all shares should be distributed among the founders.
In the case when, at the end of the year, the value of the assets of the joint-stock company is lower than the authorized capital, the company announces and must register in the prescribed manner a decrease in the amount of the authorized capital. If the size of the authorized capital is estimated below the minimum approved by applicable law, then in this case the company is liquidated.
An increase in the amount of the charter capital of an JSC may be adopted at a general meeting of shareholders. The mechanism of such an increase is an increase in the par value of a share or an additional issue of securities. In this case, one nuance should be taken into account. The growth of the authorized capital may be allowed after full payment. This increase in no case can be used to cover losses incurred by the company.
Joint Stock Company Management
As mentioned above, the main governing body of the joint-stock company is the general meeting of its founders. Their competence includes resolving issues related to amendments to the charter and authorized capital of an enterprise, forming a supervisory board and choosing an audit committee, as well as early termination of powers of these bodies, liquidation or reorganization of the company, and approval of annual reports.
In AOs, where the number of shareholders exceeds 50 people, a board of directors called the supervisory board can be created. He is responsible for resolving issues that cannot be considered at a general meeting of shareholders.
The executive body is the board, directorate, and sometimes just the director or general director. This body carries out the current management of the enterprise. It reports to the general meeting of the founders and the supervisory board. By decision of the general meeting, the powers of the executive body are sometimes transferred to another organization or to a separate manager.
Thus, summarizing the material presented, it is possible to judge the complex system of functioning of a joint stock company, the structural elements of which are: management body, executive body and ordinary shareholders.