Conversion of Private Joint Stock Companies into Public Joint Stock Companies

A private joint stock company’s entire capital is solely supplied by its promoters upon it establishment and it shares are not offered to the general public. A company whose capital is supplied via selling its shares to people by its promoters is called a public joint stock company. Partners, upon establishment of a company select the most suited type of company with regard to the specifications of companies and matching them with their requirements. Despite this, they may make a mistake and/or gradually and upon changes in circumstances made it necessary to change the type of the company. In such case, partners are interested in changing the type of the company without discontinuation of the legal status of the company. Such conversion of the company does not eliminate the legal status of the company and the previous activities of the company continues, and it privilege over dissolution and formation of another company is that there is no need of proceeding registration procedures and associated payments.

Privileges of Public Joint Stock Companies

Some of Privileges of Public Joint Stock Companies are as follows:

1)     Participation of the public in supplying the company’s capital

2)     Easy long-term financing

3)     Issuance of debt securities

4)     Capability of admission to the capital market

5)     Attraction of capital through issuing new share certificates

6)     Limited liability of shareholders

7)     Transparency and ease of transference of shares (transfer of shares in public joint stock companies is not subject to agreement of other shareholders)

8)     Continuation of company’s activities and existence

Conditions of Conversion of Private Joint Stock Companies into Public Joint Stock Companies

According to the Commercial Code a private joint stock company may be converted into a public joint stock when it qualifies the following conditions:

1)     The subject matter has been approved by the extraordinary general meeting (EGM) of the private joint stock company

2)     Its minimum capital has to be in accordance with the amount determined for the public joint stock companies, or it has to increase its capital up to the mentioned level.

3)     Complete two years have elapsed as of its date of incorporation and two its balance sheets have been approved by its shareholders’ general meeting.

4)     Its articles of association has been drawn up or amended in compliance with regulations of such law concerning public joint stock companies.

Services

Relying on scientific and operational capabilities of our experienced specialists and in consideration of all aspects, we provide an aggregate of services in respect of conversion of private joint stock companies into public joint stock companies.