Closed Joint Stock Companies

The following are the main differences between the open and the closed joint stock companies:

• Closed joint stock companies establish their own charter, allowing
participants to ensure that their interests in the company are bet­ter protected;

• Shares in closed joint stock companies are tradable only with the
consent of other owners and in accordance with relevant articles
of the charter.

Limited Liability Company

Limited liability companies (also known as limited liability partner­ships) are not set apart in the law from closed joint stock companies. However, Russian authorities have recently begun to recognize limited companies as distinct corporate vehicles. The main differences emerg­ing between limited liability and joint stock companies are the follow­ing:

• Limited liability companies are not required to issue share capi­tal;

• Limited liability companies need only establish two management
bodies, the board of directors and the board of management, and need not hold a shareholders' meeting;

• Limited liability companies must have at least two founding parties.

Full Partnership

All participants in a full partnership have unlimited joint liability for the obligations of the enterprise.

Mixed Partnership

A mixed partnership includes full partners and investor partners. Full partners bear unlimited joint liability for the obligations of the partnership to the extent of their property. The liability of investor partners does not exceed their total investment in the property of the partnership.

Trusts

While trust companies are permitted in Russia, their legal status is unclear. Draft legislation covering trusts has been prepared, but has not yet been approved.

10. Define whether the statement is trueor false.

1. Municipal enterprise is a legal entity owned by one or more members of the same family.
2. Open joint stock companies are similar in concept to any Western companies.
3. Limited liability companies must have as much founding parties as possible.
4. The participants in a full partnership have unlimited joint liability for the obligations of the enterprise.
5. Actually the liability of the investor partners exceeds their total investment in the property of the partnership.