Why is OJSC renamed to PAO? What does the reorganization give? What is the difference between an LLC and a CJSC: the main differences and features
In 2014, serious improvements were introduced regarding the activities of enterprises. Very often the question began to be heard in the media: “What is a PJSC instead of an OJSC?” In this article we will try to answer it, as well as consider the related innovations.
Changes since September 2014
Since September 2014, amendments to the Civil Code of the Russian Federation have been adopted. They introduced innovations in names, as well as some adjustments to the functioning of various forms of ownership. The question most often asked in entrepreneurship is: “What is a PJSC instead of an OJSC?”
The introduction of these changes is associated with the abolition of OJSC and CJSC, namely, a change in their names, that is, the concept of closed and open joint-stock companies has been abolished.
Instead, there will now be public and non-public societies. In essence, these will be the same associations of shareholders, but some aspects in their work will still change. So, according to the Civil Code of the Russian Federation, the following organizations will operate on the territory of the Russian Federation:
Public.
Non-public.
Non-public companies, in turn, will be divided into:
Joint-stock companies (abbreviated name AT).
Limited liability companies (short name LLC).
That is, the essence of the enterprise will remain the same, but the name will need to be changed.
The essence of the changes
Let's try to answer the question: "What is a PJSC instead of an OJSC?"
After the renaming, the activities of joint stock companies should become more open. In essence, it turns out that public societies will have to live up to their name. 
Previously, for the normal functioning of an OJSC or CJSC company, it was enough to place its shares and bonds on exchange trading and make them available to everyone. This was usually done by legal departments or even hired firms.
But now the register of shares will have to be maintained by a special registrar.
Moreover, all meetings held by the enterprise should become more public. Mandatory notarization of all decisions made is also established. Certification of documents by a registrar is also allowed.
Significant changes are also noticeable in the need for annual audits. Previously, it was established only for JSCs, but now all joint-stock companies without exception are subject to mandatory annual audits.
What is an OJSC?
An open joint-stock company, or as they used to say, an open joint-stock company, is an enterprise whose fixed capital was formed through the issue of corresponding shares and bonds. Before January 1, 1995, such enterprises were called “open joint stock companies.” 
At the legislative level, the publicity of such a society was already determined, that is, all information about it should have been available to all segments of the population.
In fact, an OJSC is a company that has many owners, in other words, shareholders or owners (holders) of shares. An example is Sberbank OJSC (now Sberbank PJSC).
To manage this company, a director or even several directors were hired, who, in turn, formed a board of directors.
The OJSC, along with other enterprises, had the right to engage in all types of activities not prohibited on the territory of the Russian Federation.
PJSC (the decoding sounds like a public joint stock company) is a company whose shares must be publicly placed on the securities market.
In turn, this change (renaming OJSC to PJSC) imposed a number of obligations on the company. A public joint stock company in the Unified State Register of Legal Entities must contain information that it is public.
From now on, open joint-stock companies have the right to exist, but they must amend their charter, submit minutes of the meeting of shareholders, as well as statements in the approved form to the registration authority.
After such changes are made, the activities of the former JSC will be slightly adjusted, as they will become public.
Such enterprises as Sberbank PJSC, Gazprom PJSC, and VTB PJSC have already made the corresponding changes to their charter documents. 
The clients of these organizations have no significant reasons for concern, because in essence, these are the same enterprises, with the same activities, only they have changed their name, in accordance with the norms of the current Civil Code of the Russian Federation.
Differences between PJSC and OJSC
The main differences between a PJSC and an OJSC are defined as follows:
1. Shareholders can be both ordinary citizens and enterprises of any form of ownership.
2. The number of shareholders is not limited.
3. Shares may be transferred to third parties without the consent of other shareholders. Right of first refusal is not permitted.
4. Reporting must be published.
5. Decisions made in a PJSC must be certified by notaries or registrars.
6. Annual audit. This rule is established for all joint stock companies without exception. 
The main difference between OJSC and PJSC is their name. Existing JSCs must undergo a re-registration procedure, although no clear time frame has been established for this.
If enterprises, for one reason or another, do not make the appropriate changes to their charter, from September 1, 2014, the provisions of the current Civil Code of the Russian Federation, regulating the activities of PJSC (interpretation - public joint-stock company), apply to them. 
How to make changes?
In order to undergo state registration, in accordance with the changes that have entered into force, the tax authority must provide:
1. Application in form P 13001.
2. Minutes of the general meeting of shareholders.
3. The new edition of the Charter in the amount of two pieces.
There is no need to pay state duty. After the documents are submitted to the registration authority, after 5 working days it makes a decision on registration or sends a reasoned refusal. Such documents can be submitted either by the head of the enterprise or by a person with a power of attorney.
After the corresponding changes are registered, the renamed OJSC to PJSC will need to perform the following operations:
1. Change the corresponding name in all seals and stamps of the enterprise.
2. Notify all banking institutions about the change and re-register accounts.
3. Notify all your counterparties about the changes that have occurred.
4. Change your name in all publicly available sources.
Additional innovations
1. An enterprise may have two or more directors. They can work both jointly and separately, but the powers of each of them must be specified in the company’s charter. But the chief accountant is still left alone.
2. The innovation affected the contribution to the authorized capital. Now the involvement of an independent appraiser is required. This is mandatory for joint stock companies.
Answering the question: “What is a PJSC instead of an OJSC?”, we can say that this is practically the same enterprise, only renamed. OJSC is an open joint-stock company, PJSC is a public joint-stock company. The main activities carried out by the OJSC remained the same, however, significant changes were made in some areas that were mandatory.
Public joint stock company is one of the key concepts of the new classification of business companies. It is distinguished by openness and transparency of investment processes, an unlimited number of shareholders, and more stringent regulations on corporate procedures. It is this form of ownership that most of the largest organizations in the Russian Federation choose.
The concept of “public joint-stock company (PJSC)” is relatively new in the civil legislation of Russia (introduced on September 1, 2014). It denotes a form of organization of a public company whose shareholders have the right to alienate their shares. Its main differences are
- presence of an unlimited number of shareholders
- free placement and circulation of shares on the securities market
- permission not to contribute funds to the authorized capital of the company until it is registered and an account is opened.
The definition of “public” suggests that this type of JSC must adhere to a policy of more complete disclosure of information compared to non-public ones. This helps to increase the transparency and attractiveness of investment processes (shares are placed and circulated among a wide range of people).
The structure of PJSC can be represented as follows (see Fig. 1)
To understand the features of the creation and activities of a PJSC, let’s compare it with other types of joint stock companies and consider examples of existing organizations with this form of ownership.
Public or open?
Since regulations contain several concepts that are close to each other in meaning, even among specialists in corporate law, debates about their legal interpretation continue. Many questions concern the differences between “new” PJSC and “old” OJSC. At first glance, “only the name has changed,” but this is not so (see Table 1)
| Comparison options | ||
|---|---|---|
| Disclosure |
|
|
| Advantage for purchasing shares and securities | It was possible to reflect in the charter the advantage of purchasing free shares by existing shareholders and security holders | |
| Maintaining a register, having a counting commission | It was allowed to maintain the register of shareholders on their own | The register is maintained by third-party organizations that have a license for this type of activity; the registrar is independent |
| Control | A board of directors was required if the number of shareholders exceeded 50 people | It is mandatory to form a collegial body of at least 5 members |
Thus, although the changes related to public joint stock companies do not seem fundamental, ignorance of them can significantly complicate the life of entrepreneurs who have chosen this form of corporatization.
Public or non-public?
From the point of view of a non-specialist, a public joint-stock company in its own words is a former OJSC, and a non-public company is a former CJSC, but this is an overly simplified vision. Let's consider what rules apply in the new classification of business entities to organizations of different legal status:
- A characteristic feature of a PJSC is an open list of prospective buyers of shares, while a non-public joint stock company (NAC) does not have the right to sell its shares through public trading
- The law requires PJSCs to have a clear gradation of issues falling within the competence of members of the board of directors and intended for discussion at the general meeting. NAOs are more free: they can change the collegial governing body to a sole one and carry out other reforms in the activities of governing bodies
- Decisions made by the general meeting and the status of participants in the PJSC need to be confirmed by a representative of the registrar company. The NAO may contact a notary on this issue
- A non-public joint stock company has the right to include in its charter or corporate agreement a clause stating that, in relation to other interested parties, priority in purchasing shares remains with existing shareholders. While for PJSC this is unacceptable
- All corporate agreements concluded in a PJSC must undergo a disclosure procedure. For the NAO, notification that the agreement has been concluded is sufficient, and its contents can be declared confidential
- All procedures for the repurchase and circulation of securities, which are provided for in Chapter 9 of Law No. 208-FZ, do not apply to organizations that have officially recorded the status of non-public in their charters.
How to re-register an OJSC into a PJSC?
The renaming procedure is carried out by replacing words in the name of the organization. Next, the charter should be revised, especially as it relates to the board of directors and the rights to benefits when purchasing shares, and brought into compliance with the provisions of the legislation on public joint-stock companies.
The Civil Code states that the rules on public companies are applicable only to joint-stock companies whose charter and corporate name directly indicate that they are public. These rules do not apply to other legal entities.
The most famous PJSCs in Russia
The largest representatives of this form of ownership regularly top the rankings of the richest organizations in the country and the world. Here are several legal entities included in the TOP-10 RBC rating for 2015:
Civil Code of the Russian Federation Article 97. Public joint stock company
ConsultantPlus: note.
If, as of 07/01/2015, the charter and name of a JSC created before 09/01/2014 indicate that it is a PJSC in the absence of signs of publicity, such a JSC must register a share prospectus before 07/01/2020 or change the charter, excluding public status from the name (Federal Law dated 06/29/2015 N 210-FZ).
ConsultantPlus: note.
JSCs created before September 1, 2014 and meeting the criteria of a PJSC are recognized as such, regardless of whether this is indicated in their name. For exceptions to this rule and refusal of public status, see Federal Law No. 99-FZ dated May 5, 2014.
1. A public joint-stock company (clause 1 of Article 66.3) is obliged to submit information about the company name of the company, containing an indication that such a company is public, for inclusion in the unified state register of legal entities.
A joint stock company has the right to submit information about the company's corporate name, containing an indication that such a company is public, for inclusion in the unified state register of legal entities.
A joint stock company acquires the right to publicly place (by open subscription) shares and securities convertible into its shares, which can be publicly traded under the conditions established by securities laws, from the date of entry into the unified state register of legal entities of information about the company's corporate name containing an indication that such a society is public.
2. The acquisition by a non-public joint-stock company of the status of a public company (clause 1 of this article) entails the invalidity of the provisions of the charter and internal documents of the company that contradict the rules on a public joint-stock company established by this Code, the law on joint-stock companies and laws on securities.
3. In a public joint-stock company, a collegial management body of the company is formed (clause 4 of Article 65.3), the number of members of which cannot be less than five. The procedure for the formation and competence of the said collegial management body are determined by the law on joint stock companies and the charter of the public joint stock company.
4. Responsibilities for maintaining the register of shareholders of a public joint-stock company and performing the functions of the counting commission are carried out by an organization that has a license provided for by law.
(see text in the previous edition)
5. In a public joint stock company, the number of shares owned by one shareholder, their total par value, as well as the maximum number of votes granted to one shareholder cannot be limited. The charter of a public joint stock company cannot provide for the need to obtain anyone's consent to alienate shares of this company. No one can be granted the right of pre-emption to acquire shares of a public joint-stock company, except in cases provided for
Before starting his own business, a potential entrepreneur should understand the existing forms of ownership and determine what suits his company. Next, we will analyze the form of ownership of PJSC, which appeared relatively recently. PAO - what is it? How to prepare documents? Read about all this in the article.
Briefly
PAO - what is it? Public joint stock company is a new classification of economic activity. Its key differences are the openness and transparency of investment processes, the entry of an unlimited number of co-owners and strict regulations of internal corporate processes. This form of activity is preferred by the largest Russian organizations.
Details
PAO - what is it? The very concept of a public joint stock company appeared in civil legislation relatively recently, more precisely in the fall of 2014. It means a form of organization of a public enterprise where co-owners can alienate shares that are their property. With the advent of PJSC, many large Russian organizations re-registered, for example, PJSC Bank Otkritie.
Key differences:
- unlimited number of co-owners;
- free placement and circulation of shares on the securities market;
- the right not to contribute money to the authorized capital before registering and opening an account.
PAO - what is it? The concept of “public” implies that the disclosure of information about this type of activity must be complete, in contrast to non-public. This ensures transparency of the company's work, which makes the investment process more attractive.
Examples of PJSC in Russia
- PJSC Bank Otkritie.
- PJSC "Moscow United Electric Grid Company".
- Branch of PJSC Sberbank.
- PJSC "MDM Bank".
- Branch of PJSC "MOESK" and others.
Public or non-public activities
In simple words, a public joint stock company is a former OJSC, and a non-public company is a former CJSC, but this is an overly simplified definition. Let's consider what rules are used in the new classification of concepts in relation to companies of different legal status:
- A characteristic feature of a PJSC is an open list of potential share owners, while a non-public joint stock company cannot sell its own shares at public auctions.
- According to the law, a PJSC must have a clear gradation of issues that fall within the area of responsibility of members of the board of directors and are determined for discussion at the meeting of shareholders. Non-public activities are more independent. Here, the collegial governing body can be changed to an individual one, and other reforms can be carried out in the work of governing bodies.
- All resolutions adopted at the general meeting, as well as the position of the participants of the PJSC must be confirmed by representatives of the registrar organization. The NAO can resolve this issue with a notary.
- In a non-public joint stock company, it is possible to include in the charter or corporate agreement a clause stating that when selling shares, the existing shareholders have a pre-emptive right of repurchase and only then others who wish to do so. This is unacceptable in PJSC.
- All corporate agreements entered into in a PJSC must undergo a disclosure process, while in a NJSC it is sufficient to notify of the conclusion of an agreement, the contents of which may be confidential.
All actions for the repurchase and circulation of securities provided for by Federal Law No. 208, Ch. 9 are not applicable to non-public joint stock companies.
PJSC. Opening a legal entity
The registration process and entering data about PJSC into the state register is carried out in accordance with the legislation of the Russian Federation. The peculiarity of this legal entity is that during its registration it is not required to provide the company’s Charter; the action takes place on the basis of the constituent agreement. The criteria for this document are regulated by Article No. 52 of the Civil Code of the Russian Federation. Also, the formation of a PJSC requires share capital, the maximum and minimum limits of which are not specified.
List of documents for registration:
- A photocopy of the constituent agreement, certified by a notary.
- An agreement confirming the right to use a legal address.
- Photocopies of TIN and passport of all shareholders.
- Payment order or check confirming payment of state fees and other registration costs.
There is nothing special about writing an application. All samples are presented for review on the official portal of the Federal Tax Service of Russia. The basic requirements are that the application must be filled out manually in block letters or on a computer without errors, typos or corrections. And the attached documents must be drawn up in accordance with established standards, otherwise registration will be denied.
Important! The entire set of documents must be numbered and laced.
Founding Agreement
A PJSC that has been opened may have SPD and companies engaged in commercial activities among its shareholders. To organize and register a PJSC, the formation of a constituent agreement is required, the most important points of which are:
- The name of the institution in full or abbreviated form, the use of abbreviations and foreign words is allowed.
- Full legal address.
- Sequence of activities.
- Amounts of contributions, their total volume.
- The share participation and contribution amount for each accomplice are formed.
- A plan for paying the entrance fee is fixed.
- Responsibility for non-compliance with the terms of the constituent agreement is determined.
In addition to the key provisions, the agreement:
- the execution of general activities is regulated;
- the rules for organizing the property complex are prescribed;
- principles for the execution of conditional activities have been established;
- the rules for separating income and expenses are determined;
- the conditions for acceptance and withdrawal from the PJSC are specified.
Step-by-step registration instructions
Due to the fact that most of the processes for registering a legal entity are now optimized, it is possible to issue a certificate in a short period, no more than three days from the date of submitting documents to the authorized bodies. To register and receive PJSC details, you need to complete a few simple steps:
- Name. Choosing an original name for the organization.
- Legal address. It is necessary to resolve the issue of purchasing/renting premises for registering a legal address.
- Field of activity. Choosing a business direction and establishing it in the OKVED system.
- Determination of the amount of authorized capital.
- Protocol on the establishment of PJSC.
- Preparation of the memorandum of association based on the scope of activity.
- Submitting an application for registration of a PJSC.
- Payment of state duty.
- Submitting an application for a simplified tax system (if necessary).
- Submitting a package of documents to the Federal Migration Service and receiving a receipt for their acceptance by employees.
Registration cost
In most cases, when registering a new organization, the founders do not have free funds, and therefore try to save on everything. The main question for startups is how much will all this cost if:
- use the help of specialists;
- act independently.
There are two sides to the same problem of saving money. When turning to professionals, registration costs will certainly increase, but when concluding an agreement to provide legal services, the company’s clients receive a full guarantee of the quality of the services provided. Moreover, in the future, such services will be important for a representative company.
Approximate prices:
- An integrated approach - from 8 to 12 thousand rubles.
- The state registration fee is 4 thousand.
- Formation and certification of the constituent agreement - from 300 to 600 rubles.
Those who have a lawyer among their founders are luckier. In this case, you can save on paperwork and registration; then all that remains is to pay the state fee and a small amount for certification of documents by a notary.