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This article is based on the "ABC of Russian Business Law". You may subscribe here

Types of business presence

Anti-monopoly regulations

Labour law


Closed-type JSC and LLC have much in common, but at the same time there are substantial differences between them. The right of LLC participants to withdraw freely is the main difference between LLC and JSC. The comparison of the two types of legal entities you will find below.

Closed joint-stock society
Limited liability society

Statutory documents

Charter Charter and Statutory Agreement

Maximum number of participants

Not over 50, otherwise reorganised into open joint-stock society Not over 50, otherwise reorganised into open or closed joint-stock society, or production cooperative

Rights and duties of participants

Established by law Besides those set by law, additional rights and obligations may be set by statutory documents

Withdrawal from society

Impossible Possible at any time, with payment of the actual value of participatory share

Dismissal from society

Impossible Possible with recourse to court, at appeal of participants possessing 10% of participatory shares

Making additional contributions to assets

Impossible Defined by statutory documents

Board of Directors

Compulsory if over 50 shareholders. Members of the executive body may not constitute the majority May exist. Members of the executive body may not have over a quarter of positions

Establishment of reserve funds

Compulsory Not required
Closed joint-stock society
Limited liability society

Limitation on circulation of shares

Shareholders' pre-emptive right to purchase shares The law contains an extensive list of limitations

Participants alienating their shares to the society

  • At the society's initiative:
    • a) by the General Assembly's decision on reducing statutory capital
    • b) by the decision of the Board of Directors, but not over 10% of statutory capital
  • Society is to purchase shares:
    • a) in case of reorganisation
    • b) in case of a large-scale transaction
    • c) if amendments are introduced to the Charter
  • At the society's initiative: may not be done
  • Society is to purchase participatory share:
    • a) if a ban of ceding the participatory share to third parties exists and participants refuse to acquire it
    • b) if there is no consent for ceding the participatory share to a participant of limited liability society or to a third party
    • c) in case of a participant's withdrawal or dismissal
    • d) in case of contribution to the statutory capital not having been made in full and if the participants do not consent to the share being transferred or distributed
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