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The main characteristics of Russian juridical forms.

Classification of legal persons:

1. Economic companies:
1.1 Limited Liability Company (LLC)
1.2 Additional Liability Company
1.3 Joint Stock Company (JSC: Private Joint Stock Company & Public Joint Stock Company)
2. Economic partnerships:
2.1 General Partnership
2.2 Commandite Partnership
3. Production Cooperative
4. State and Municipal Unitary Companies
5. Consumer’s Cooperative
6. Public Organization
7. Religious Organization
8. Charitable and other Funds


Economic partnership is joint community of several persons for running a common business under a unit name. Two types of partnerships exist.

General Partnership: its participants in accordance with concluded treaty between them run a business from partnership’s name and bear responsibility for its obligations by their owned property. In general partnership only private businessmen may enter, and one person can be a participant of only one partnership.

General partnership’s name must include the real names of its participants or the name of one participant and words “&Co (and company)”.

A participant of partnership either could be another legal person.

General partnership is formed by concluding a constitutive agreement, signed by all partnership’s participants.

The participants manage partnership by making decisions by a solid vote or by a majority vote.

Profit and loss of partnership distribute among its participants in accordance with their shares.

General partnership must contain more than two persons.

Commandite Partnership: it’s a partnership where besides the participants running a business and bearing responsibility for partnership’s obligations by their owned property (“full” participants) are one or several participants - depositors who incur losses concerned with partnership’s activity only by their shares and don’t run a business (commandites).

Such partnership must contain no less than one “full” participant and one commandite.

Economic companies: Limited Liability Company, Additional Liability Company and Joint Stock Company.

Limited Liability Company is a profit making organization which share capital is divided into shares stated by constituent instruments, and founded by one or several persons who incur losses concerned with company’s activity only within the limits of their shares.

Limited Liability Company’s constituent instruments are constitutive agreement and charter approved by shareholders. If LLC is formed by one person then the only constituent instrument is a charter.

The ceiling amount of LLC’s shareholders is 50 members. If this amount is exceeded then LLC must be transformed into Open Joint Stock Company, Production Cooperative or must be liquidated.

The share capital of LLC consists of value of participants’ shares.

The superior managing body of LLC is the general meeting of shareholders, where every shareholder has vote amount pro rata his share.

Company’s shareholder has the right to pass his share to one or several shareholders of this company, but not to third person if it’s not provided by charter. Besides company’s shareholder has the right to leave this company and to receive a sum of money equaled to his share.

LLC is active with at least one shareholder.

Additional Liability Company is a profit making organization which share capital is divided into shares stated by constituent instruments, and founded by one or several persons who together incur additional responsibility for company’s obligations by their owned property at the rate divisible by their shares.

The peculiarity of such company has 3 points:

1) The responsibility is additional - subsidiary – i.e. demands to company’s shareholders can be made only in case of insufficient company’s property for settling with creditors;
2) The responsibility is common (joint security), i.e. creditors can make demands to any of company’s shareholder and he’ll have to meet their demands.
3) The shareholders incur liabilities divisible by their shares.

Joint Stock Company is a profit making organization which share capital is divided into shares the rights on which are verified by capital issues (shares). The shareholders of such companies don’t incur liabilities for company’s obligations and incur losses concerned with company’s activity only within value of their shares.

The constituent instrument of JSC is a charter. The share capital of JSC is amounted to nominal value of all purchased shares. The share capital of JSC can contain some equities with equal nominal value and some shares of preferred stock of preference share whose volume shouldn’t be more than 25 % from all shares.

Stock gives its holder a right to take part in general meeting of shareholders with deciding vote, a right to receive the information about company’s activity, a right to draw a dividends, in case of company’s liquidation a right to draw company’s property, etc.

Shares of preferred stock of preference share limit its holder in a right to take part in general meeting but give him a right to draw dividends in fixed amount predominantly to other shareholders regardless of company’s profitability.

JSC may be of two types: Private Joint Stock Companies & Public Joint Stock Companies.

Private Joint Stock Company has to allot shares of new issues between persons mentioned in its charter, and Public Joint Stock Company has a right to suggest shares to general public, i.e. carries on public subscription.

The ceiling amount of Private Joint Stock Company’s shareholders is 50 members, otherwise it must be transformed.

 
   
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