Joint Stock Company
A joint stock company (JSC or a shareholding company) is a legal entity the capital of which is divided into shares held by three or more individuals or organisations. Shareholders of the company have limited responsibility for its debts and liabilities amounting to the extent of the portion of their contributed capital.
One of the biggest advantages of a JSC is the company’s capability to raise capital by issuing securities and being listed on the Securities Exchange, however, founding members must be in possession of at least 20% of the total number of common shares at any time. Issued shares may take form of common shares (compulsory), preferred shares or bonds (optional).
A common shareholder in such company has the right to attend the General Shareholders Meeting, vote in proportion to their amount of shares, receive dividends and be given priority in buying new shares offered for sale.
General Shareholders Meeting
The highest decision-making body of a JSC is General Shareholders Meeting. This meeting comprises all shareholders with the right to vote and must be organised at least once a year.
Depending on the type of decision on hand, resolutions must be approved by shareholders representing at least 51% of the charter capital (of shareholders present at the meeting). For certain more important decisions, 65% is required.
Board of Management
General Shareholders Meeting as a body is managed by Board of Members (BOM). Board consists of three to 11 members that are elected by the GSM for a term of up to five years. BOM has the full authority exercise the company’s rights and perform obligations that do not fall under the authority of the GSM.
While BOM meetings do not have to be organised periodically, the law prescribes that the members meet every quarter. Decisions are made upon agreement of the majority of attending members and in case of even votes, Chairperson has the deciding vote.
(General) director is appointed by the BOM for a term of up to five years and is responsible for the day-to-day operation of the company. They are the legal representative of the company, unless the charter gives this status to the Chairperson of the BOM. An appointed director of a JSC cannot be a director in a different enterprise.