In the modern economy of the Russian Federation, there are several forms of activity of business entities. Each company chooses which one to choose for organizing its activities. Joint-stock companies have a number of features. Such organizations are usually divided into open and closed varieties.
In order not to get confused in concepts, you need to understand the abbreviations. Closed Joint-Stock Company and Open Joint-Stock Company have a number of organizational differences. The first form of business entities is now renamed as AO - joint-stock company. But by it they mean a closed type.
How AO differs from OJSC is a very interesting question. This leads to a number of features of the functioning of enterprises. Companies have the ability to reorganize the company and create a joint-stock company instead of a public company. This is necessary for a number of reasons. How this happens, and why it is needed, should be considered in more detail.
What is a joint stock company?
To understand the difference between AO and OJSC, it is necessary to consider this form of economic activity in a general sense. Such an organization is formed by several founders. The authorized capital is formed from a certain number of shares that are distributed between owners. They emit when creating a company. Moreover, the quantity of securities and their nominal value are immediately stipulated. The rules for their distribution denotes the type of organization of the enterprise.
These securities share their owners with certain rights. Because the shareholder contributed some amount of his funds to the authorized capital (this is fixed by the share) at the end of the reporting period to receive the corresponding part of the net profit. This remuneration corresponds to the share of the holder of securities in the total authorized capital. This shareholder income is called dividends.
The owner also has the right to vote in the process of making decisions important to the company, as well as receive part of the property in the event of its liquidation.
Rights and obligations of shareholders
Studying how AO differs from OJSC, it is necessary to pay attention to the rights and obligations of shareholders. They are limited by certain legislative frameworks. Their liability is limited only by the value of the securities.
The risk of losses does not apply to all property of the owners. But if in the event of bankruptcy of the enterprise, guilt was established, for example, of a hired director, a certain group of shareholders, then they bear increased responsibility. If the company does not have enough funds to pay off its debts, subsidiary liability may be laid on the perpetrators.
Shareholders may also be jointly and severally liable if the authorized capital of the enterprise consists of a certain part of unpaid securities.
All decisions are made at a meeting of shareholders. The right to vote has the same weight as the shares of the founder. If he has 50% + 1 share, this company is managed by one individual or legal entity.
Distinctive features
A company is organized as a CJSC if the number of shareholders does not exceed 50 people. This form is typical for medium-sized businesses. The difference between AOs and OJSCs primarily lies in the way the shares are distributed.
In a closed joint-stock company they are acquired by a limited circle of persons. The authorized capital in this case is less than 100 times the minimum wage (minimum wage).
In OJSC, the number of shareholders is unlimited. This form of management is characteristic of large business. Securities are sold through free sale. Information on the state of the company, its financial activities in this case is provided publicly.
Shares are freely traded in the stock market. The size of the authorized capital in this case is not less than 1000 minimum wages.
Principal differences
The difference between JSC and JSC is quite significant. First of all, the approach to the sale of shares is fundamentally different. If the joint-stock company decides to sell part of the securities, the consent of all shareholders will be required. Moreover, they have an advantage when buying. OJSC sells shares freely, without notice to other participants. Therefore, the number of holders of securities is not limited.
AO does not publish its financial statements in the public domain. OJSC is obliged to provide such information openly. This makes it possible for everyone to evaluate the result of the company. For this reason, investors are much more likely to provide their temporarily available funds to open-type organizations. CJSC is not expanding to the level of large business.
The state as a founder
In order to understand how AO differs from OJSC, it is necessary to consider the case when the state owns part of the shares. The founders of the company can be the governing bodies of the Russian Federation at various levels of subordination.
In this case, the organization can only be an open type of issue. Information on the results of the activities of such an enterprise is mandatory publicly available. If part of the shares is owned by subjects of the governing bodies of the Russian Federation, its municipal organizations, the formation of a closed joint-stock company is strictly prohibited.
This is another significant difference between the two forms of management. Shares are publicly traded on the stock market.
Reorganization
For certain reasons, a reorganization of a JSC into a joint-stock company may be required. This conversion can be performed in the opposite direction. In this case, the amount of the authorized capital, as well as the rights and obligations of the owners of securities, changes.
If, according to the results of the company’s activity, its authorized capital does not exceed 1000 minimum wages, then documents should be prepared for the reorganization. This provides a number of benefits to the enterprise. But the reduction of own sources leads to a decrease in production.
This is a negative trend, but with a significant drop in sales, the market value of the company's shares, this is a necessary measure to prevent bankruptcy. The reorganization process is taken very seriously. The decision to change the form of management is made at a meeting of shareholders based on the results of financial statements.
Preparation of documents
In the process of changing the form of management of an open company to a closed joint-stock company, no conversion is carried out. A joint-stock company in a joint-stock company can only be reorganized. If there is a need for this, the board of directors prepares the necessary documentation.
For this, a project is drawn up, which includes a number of mandatory points. The company's management in this document discloses the procedure and conditions for the reorganization. Next, the process of exchanging the shares of the old company for deposits, securities of the new organization is specified.
Creating a new society
The circle of persons among whom new securities are distributed does not exceed 50 people. A full list of property is also being drawn up, which becomes the property of the reorganized joint-stock company.
The meeting of shareholders approves the size of the authorized capital, appoints the leaders of the new company.
Further, the state registration authorities establish the fact that the open company of shareholders ceases to exist, and then a new closed organization is created. This will allow the company to function in accordance with the occupied part of the market. In the course of this action, the relevant documentation is recorded.
Required Documentation
There is a significant difference between the newly created and reorganized enterprise. The main document, indicating the difference between the two organizational forms of companies, is the succession. This document is a deed of transfer or separation balance sheet. It depends on the form of the reorganization itself.
Re-registration of JSCs in JSC requires the collection of a specific list of documents. If the shares are distributed among individuals, it is necessary to provide the commission with copies of passports, identification codes. If the owner of the securities is a legal entity, a copy of its registration documentation will be required.
Next, data on the receipt of funds or property of shareholders is prepared. After that, the type of company activity is determined. She is assigned the appropriate OKVED codes. In order for the organization to assign a legal address, it is necessary to provide a lease. If it is not there, representatives of the commission go to the location of the main production facilities of the enterprise. She is assigned a legal address.
What does the reorganization give?
The change of JSC to AO entails significant changes for the organization. First of all, the balance sheet currency is significantly reduced. With a decrease in own financial sources, the investment rating is falling.
Less credit will be able to attract society. It has the right not to publicly publish the results of its activities, but it also repels investors. All ownership of shares recorded in the IFTS. Wanting to sell their securities, the owner in writing notifies the remaining shareholders of his decision.
If they do not agree to purchase the shares, they can be sold to the new owner. The documentation collected during the creation of the company is subject to change. It introduces new data. This is a longer process.
Having considered how AO differs from OJSC, a number of advantages of each business form should be noted. Depending on the volume of business, one or another type of object is chosen. This allows companies to organize their activities most effectively. In an ever-changing market environment, you can reorganize a company into a joint-stock company and vice versa. In some cases, this is a necessary measure, which cannot be dispensed with.