Joint stock company means an enterprise created on the basis of a voluntary agreement of individuals or legal entities to carry out economic activity. The authorized fund of this enterprise is formed by issuing shares.
Creation and activity of joint stock company "About the joint-stock company" It is regulated by the Law of the Republic of Azerbaijan.
What forms of joint stock company are there?
The joint-stock company is created in two forms: open and closed.
- Closed joint-stock company (JSC)
Closed-type joint-stock company shares are considered a form of closed-type joint-stock company that can be distributed only among the founders and can be alienated with the consent of the majority of the founders.
- Open joint stock company (ASC)
An open-type joint-stock company means a form of joint-stock company whose shares can be independently alienated.
Who is the shareholder of the company?
Every legal or natural person who has a temporary share certificate or share of the company is considered a shareholder of the company.
When the founders of the company are legal entities, they retain their legal entity status and economic independence.
Establishment of society
A joint stock company is founded by at least three legal or natural persons. However, joint-stock companies established by management bodies authorized to dispose of state property are an exception. There is no limitation on the number of founders in these societies. In this type of companies, the founder of the joint-stock company can be alone.
The activity of the society is regulated by the charter approved by the founders at their general conference (meeting). The following must be stated in the charter:
- company name, type, legal address, type of activity;
- the amount of the charter fund;
- founder or composition of founders;
- type, category and nominal value of shares to be issued;
- the amount of shares received by the founders;
- composition and powers of management, control and financial-audit bodies;
- actions taken in cases where shareholders do not fulfill their obligations;
- the list of funds and the order of their formation.
The process of establishing a company consists of holding a founding conference by the founders, and organizing a subscription to shares. This process ends with the registration of the society in accordance with the Civil Code of AR. Registration is done within one month after the submission of the necessary documents.
If a state enterprise participates in the establishment of a joint-stock company, in this case the relevant opinion of the Ministry of Finance must be obtained.
A joint stock company can also be created as a result of the transformation of a state enterprise into a joint stock company. In this case, the basis of this transformation is determined by the AR Milli Majlis.
Subscription to the company's shares
Subscription to shares in the company is carried out on the basis of the founding plan or founding agreement.
The shares of the closed joint-stock company are acquired according to the agreement concluded between the founders.
The subscription to shares in an open joint-stock company is organized by the founders. The company can sell its shares directly itself or through the stock exchange and bank.
Subscription to shares must be announced in the mass media. The advertisement must state:
- name and address of the company (founder);
- duration of activity;
- the size of the charter fund;
- nominal value and quantity of shares;
- rights granted to shareholders;
- when the subscription starts and ends;
- address and date of the constituent conference.
The duration of the subscription should not exceed 6 months.
The persons participating in the subscription must pay 10% of the nominal value of the share in advance. A written commitment to sell a certain amount of shares is given to those persons by the founders.
The subscription ends when the time specified in the advertisement expires. If shares are not subscribed to 60% within the specified period, the process of founding the company is considered incomplete. In this case, the property they gave to the subscribers or the amount they paid is returned within 30 days.
30% of the nominal value of the share should be paid, taking into account the amount paid in advance by the subscribers, until the day of convening the founding meeting. The founders issue a temporary certificate to those persons.
In closed joint-stock companies, 50% of the nominal value of the shares must be paid by the founders by the day of convening the constituent meeting.
Constituent meeting of the joint-stock company
The founding meeting of the company is convened within 2 months after the end of the subscription period. If the constituent meeting is not held within the specified period, the subscriber can withdraw his share.
The form of participation in the founding meeting is reflected in the announcement.
The constituent assembly resolves the following issues:
- makes a decision on the establishment of the society;
- reduces the amount of the charter fund if the prescribed subscription volume is not formed;
- elects the supervisory board, control (inspection) commission and executive body for the first period of activity;
- confirms the prices of the shares issued in the form of property.
At least 60% of subscribers must participate in the founding meeting.
If there are not enough members at the first founding meeting, a new meeting is called by the founders. At this time, at least 50 % of subscribers must participate in the meeting.
If a sufficient number is not completed the second time, the society is considered incomplete.
Decisions on the creation of the company, the selection of executive and control bodies, the supervisory board, and the granting of privileges to the founders are made by a 3/4 majority of the participants. Decisions related to other issues are resolved by ordinary majority vote.
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