The charter fund of the society
The minimum volume of the charter fund of open-type companies is set at 10 million manats, and the minimum volume of the charter fund of closed-type companies is set at 5 million manats. The amount of the charter fund must be formed within one year and the shares must be state registered.
According to the decision of the general meeting of shareholders, the amount of the charter fund can be changed. A general meeting is called on this issue. The information on convening the meeting should reflect the following:
- the reason for the change of the charter fund, the method of change and the amount of the change;
- the draft of the changes provided for in the charter regarding the change of the company's charter fund;
- number of newly issued shares, nominal value and total amount of shares;
- subscription period for newly issued shares.
The company can increase its authorized capital in cases where the shares it previously issued have been paid not less than the nominal value. (the case of increasing the fund by giving property is an exception).
The ways of increasing the charter fund are as follows:
- issuance of new shares;
- conversion of bonds into shares;
- increasing the nominal value of shares.
The decision to change - increase and decrease the charter fund is adopted in the manner determined by the charter of the company.
The ways of reducing the charter fund are as follows:
- by reducing the nominal value of shares;
- by withdrawing shares from circulation and canceling them.
In accordance with the decision of the general meeting of shareholders, shares that are not submitted for liquidation within one year for the purpose of reducing the charter capital in the manner determined by the company's charter are considered invalid. At this time, stakes are returned.
It is forbidden to issue shares to compensate the loss of the company.
An open-type joint-stock company must provide information about its activities through the mass media every year in the form determined by the Ministry of Finance of the Republic of Azerbaijan. The responsibility for the integrity of the published information is borne by that joint-stock company and its responsible persons.
Company shares
Shares are indivisible. If a share is owned by several persons, they all act as one person before the society.
Shares are bearer and bearer. Shares are issued when their value is fully paid. Individuals can own only registered shares.
The company can issue preference shares. The total amount of these shares cannot exceed 10 percent of the charter capital. Preference share holders do not have voting rights. (unless otherwise specified in the company's charter)
The company may sell, resell, retire or repurchase its shares among its employees. At this time, the redeemed shares must be sold within one year.
During this period, these shares are not taken into account in the distribution of profits and voting at the general meeting of the company.
Society's reserve fund
In the company, a reserve fund is created at the expense of deductions from the balance profit in the amount determined by the statute. In the charter, the specific amount of deductions should be provided within the framework of 5-10 percent of the profit.
The maximum volume of the reserve fund should not be more than 25 percent of the charter fund, and the minimum volume should not be less than 15 percent.
Property of the society
The company is the owner of the income earned as a result of economic activity, the produced product, the property given to it by the shareholders (founders), as well as the property obtained on the grounds permitted by the legislation.
Shareholders (founders) can give their shares to the charter fund in the form of valuables, buildings, equipment, securities, rights to use water, land and other natural resources, cash, and foreign currency.
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SEE ALSO: What is a joint stock company and how is it established?
