Joint-Stock Companies, Protection of Shareholder’s Rights
Creation of Joint-Stock Companies
Our specialists have experience in creating companies of various levels of complexity, beginning with those created on standard conditions when there are no specific requirements for management bodies, contributions in the authorized capital or other individual parameters. This includes those integrated into large holding structures or companies with several investors’ interests to be taken into accountrequiring the mechanisms to limit executive bodies’ authorities, and compliance with company documents providing the corporate policy and other specific features of the holding structure.
As a rule, a joint-stock company implies the use of debt capital in its operation and thus the presence of several or numerous shareholders. Because of this the legislation sets specific requirements for the procedure of creation and operation of a joint-stock company. They are mainly aimed, directly or indirectly, at protecting shareholders’ rights.
At the same time, the operation and relatively clear legal regulation of joint-stock companies operations contribute to the improvement of the image of this type of company in business community.
Please see also Reorganization of Legal Entities, for information about creation of companies through reorganization.
Read more – Creation of Legal Entities.
Securities Issues (shares, bonds)
Corporate Lawyer prepares companies for the issue of shares and bonds, supports state registrations of securities issues as well as placement of issues securities.
Preparation of Securities Prospectus
In some specific instances, stipulated by the legislation, a securities issue must be accompanied by the preparation of a securities prospectus.
A securities prospectus mostly includes information about the business of the securities issuer. It also covers information about the market conditions, existing competitors and business partners of the securities issuer. If the issuer has no such information, it can be obtained by marketing research.
While preparing a securities prospectus, Corporate Lawyer specialists can request, demand, gather, analyze and process information about the securities issuer.
Disclosure of Information
Some joint-stock companies as well as other issuers, in accordance with the legislative requirements, must disclose information about specific facts concerning their operation and securities issue.
Corporate Lawyer specialists monitor such companies’ operation and disclose information when required – they prepare and control the correct presentation of the following information to respective state or authorized bodies:
- information about material facts;
- quarterly reports;
- the list of affiliated entities, etc.
Changing the Type of a Joint-Stock Company
There are two types of the joint-stock companies: closed ones and open ones. In terms of their legal conditions, open joint-stock companies are more akin to public entities and closed ones are less public ones. As a consequence, as a rule, the operation of open joint-stock companies is more complex as the legislation imposes more obligations upon the open joint-stock companies. In Russia the majority of companies are the closed type.
In some cases, a joint-stock company may require to change its nature.
Let us note that the change in the type of a joint-stock company is not a form of the reorganization of a joint-stock company as it is often mistakenly considered to be.
Our company specialists provide services for changing the types of a joint-stock company as well as give their consultations to our customers about the procedure and expediency of changing the type under specific conditions and about legal consequences.
Change in the amount of a company’s authorized capital
Corporate Lawyer provides assistance in a whole range of activities associated with changes in the authorized capital of companies. Our specialists have extensive experience in dealing with such issues.
In most cases, an increase or a decrease in the authorized capital of a company is a complex and time-consuming procedure associated with the analysis of financial and economic condition of the company, finding and attracting the necessary funds, and the adoption by the management bodies of the relevant decisions and other tasks.
Holding of Shareholders’ Meetings
We have experience in holding both annual and extraordinary general shareholders’ meetings.As a rule, holding shareholders’ meetings is part of the work for the global project managed by our company. However, this service can be run independently.
When preparing for shareholders’ meetings, we analyze the general situation within the structure and the interests of the shareholders and the legal conditions of the joint-stock company. We develop minutes for the meeting taking into account the customer’s needs and legislative requirements and contact evaluators and auditors for the preparation of the documents required for the meeting.
It often happens that the incorporation and other internal documents of a joint-stock company do not permit a shareholders’ meeting to be help in the correct way with the risks that the decisions taken there will be appealed against due to violations of the convocation procedures and rules for holding the meeting. We minimize such risks.
When providing our services relating to holding shareholders’ meetings, we prepare a plan of actions and approve it with the customer. If requested, we arrange the evaluation of the property or shares of a joint-stock company and also arrange audits and inventory of property.