Answers to Many Common Questions About Setting Up Business Operations in Russia
It is not unusual to have numerous questions about moving or expanding a business to Russia. Here, you will find answers to many common questions and information about how to get help with concerns that more specific to your unique business.
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What are the governing bodies of a Russian joint-stock company ?
A joint-stock company’s higher management body is the general meeting of shareholders, which must convene at least once a year. A public joint-stock company must have a board of directors consisting of at least five members. The company’s executive body may be collegiate (board, directorate) and/or “one-person” (director, general director). It is also possible to have several “one-person” executive bodies in a joint-stock company that may represent the company jointly or separately (with a full or limited scope of authority). A joint-stock company’s executive body carries out the day-to-day management of operations and reports to the board of directors and the general meeting of shareholders.
What is a joint-stock company under the Russian law?
Under the Civil Code, a joint-stock company’s capital is divided into a set number of shares. The shareholders in a joint-stock company are not liable for its obligations and accept the risk of losses resulting from operations within the limit of their respective stakes. Shareholders may sign shareholders’ agreements that regulate how their rights are exercised.
Russian law stipulates that only joint-stock companies may issue stock, which is deemed as securities and subject to registration. In addition, it describes public and non-public joint-stock companies. The former are entitled to have their stock publicly traded, but they must comply with rather strict legislative requirements concerning the structure of their governing bodies, relationships between shareholders, obligatory reporting, etc. The latter companies, in turn, cannot arrange for public trade of their stock, but may enjoy more flexible regulation with respect to their corporate structure and operations.
A joint-stock company’s share capital is composed of the nominal amount of shares acquired by its shareholders. The minimum “charter” (share) capital for public and non-public joint-stock companies is 1,000 and 100 times the minimum monthly wage, so RUR 100,000 and RUR 10,000 respectively.