Doing Business in Azerbaijan 2009 - Azerbaijan Export ...

190 DOING BUSINESS IN AZERBAIJAN
Annex 2: Brief comparative analysis of LLC and JSC as per Azerbaijani law
JSC LLC
Minimum number of Founders At least 1 founder. Closed JSC-maximum number At least 1 founder. However, there is not a statutory
of shareholders may not exceed fifty. If such limit is limit for the number of participants.
exceeded, such close JSC must either be reorganized
into an open JSC, or be judicially liquidated
Liability of Founders The participants/shareholders are not personally liable for the obligations/liabilities of JSC/LLC. Liability of
founders is limited to the amount of their equity (capital) contribution.
There is no specified minimum capital requirement.
However, the Civil Code 2000 states that the
minimum capital is to be set by the relevant
executive authorities. Charter capital must be paid in
full prior to state registration. Capital contributions
in kind must be valued by an independent auditor.
Paid in capital of participants is not considered to
be a security. Therefore, there are no registration
requirements with the State Securities Committee.
Unless provided otherwise in the Charter, a
participant may alienate (sell/transfer) his
participating interest to third parties. However, the
other participants have the right of first refusal, if
the Charter does not provide otherwise.
Capital Requirements Open JSC – 4,000 AZN circa 4,760 USD; Closed
JSC – 2,000 AZN, circa 2,380 USD. Charter capital
must be paid in full prior to state registration.
Capital contributions in kind must be valued by an
independent auditor. Value of in-kind contributions
of a newly founded company and existing company
is determined by a foundation meeting and general
meeting of shareholders respectively.
Securities Shares must be registered at the State Securities
Committee. Placement of securities can be public
(offer to public at large) or close (offer to a limited
group of investors). Open joint-stock companies can
place securities only through public offering (except
for establishment and reorganization of a company
and conversion of shares) and close joint stock
companies can place securities only through close
offerings.
Transferability of Shares/ Open – no restriction on transferability of one’s
participatory interest
shares to another. Closed – shareholders have the
right of first refusal.