Understanding Russian Corporate Structures
A Russian company name provides useful information about its disclosure requirements. A firm understanding of Russian corporate structure types can help analysts determine where to look for ownership information on Russian documents.
Russian companies’ corporate structures are regulated by Chapter Four of Russia’s Civil Code. According to Russian law, commercial entities can follow one of six different corporate structures. The two most common corporate structures are limited liability companies and joint-stock companies. These are the two different types of entities we will discuss in this article.
Limited Liability Company (Общество с ограниченной ответственностью)
A limited liability company (LLC) is defined by Russian law as an entity whose authorized capital is divided into parts. These parts are owned by the company’s participants.
An LLC discloses its current participants on its Russia Federal Tax Registry corporate record. This is the section of the document that says “Information on the founders (participants) of the legal entity [Сведения об учредителях (участниках) юридического лица].” This information is usually found on page three of the document.
This section provides a start date for when the individual or entity became a participant in the company. It also includes an observation date for stated percentage of ownership. This percentage of ownership is true as of the date of document. Of course, the percentage of ownership is no longer true if the company is closed.
Joint-Stock Company (Акционерное общество)
A joint-stock company (JSC) is defined by Russian law as an entity whose authorized capital is divided into shares. These shares are owned by the company’s shareholders.
A JSC discloses only its founding shareholders on its Russia Federal Tax Registry corporate record. Founding shareholders are listed in the same section of the document that discloses ownership of LLCs (“Information on the founders (participants) of the legal entity”), but the date corresponding to the shareholding amount is only a start date.
One of the documents that discloses a JSC’s current shareholders is an affiliates list (Список аффилированных лиц), which can be accessed via a company’s profile page on one of five disclosure agencies—Interfax, PRIME, AK&M, AZIPI, and SKRIN. But only public joint-stock companies must disclose their shareholders.
Public vs. Non-Public Joint-Stock Companies
A JSC can either be public (публичное) or non-public (непубличное). A public joint-stock company (PJSC, or ПАО) is publicly traded, while a non-public joint-stock company (JSC, or АО) is not.
All public joint-stock companies must disclose their shareholders on a quarterly basis via one of the disclosure websites listed above. Previously, a public joint-stock company was known as an open (открытое) joint-stock company (OJSC, or ОАО). Although open joint-stock companies were required to re-register as public joint-stock companies, some companies still have “open joint-stock company” in their names.
Non-public joint-stock companies which have more than 50 shareholders or which publicly offer bonds or securities are also required to disclose their shareholders via one of the disclosure websites. Non-public joint-stock companies which do not have more than 50 shareholders or which do not publicly offer bonds or securities are not required to publicly disclose their shareholders.
Previously, a non-public joint-stock company was known as a closed (закрытое) joint-stock company (CJSC, or ЗАО). Closed joint-stock companies were not immediately required to re-register as non-public joint-stock companies; therefore, some entities still have “closed joint-stock company” in their names. Closed joint-stock companies do not have to publicly disclose shareholders.