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A Joint Stock Company (JSC) is a type of business entity (legal person) whose authorized capital is divided into a specific number of shares of equal nominal value. These shares certify the corporate rights of participants — the shareholders. Owners of shares bear limited liability for the company’s obligations — their potential losses are limited to the value of their shares.

The JSC is one of the most common corporate forms worldwide because it allows raising significant investments through the issuance and trading of shares on the stock market.
In Ukraine, the activities of joint stock companies are governed by the Law of Ukraine “On Joint Stock Companies” No. 2465-IX of July 27, 2022, which came into force on January 1, 2023.

Key Features of a Joint Stock Company

• Authorized capital and shares. The authorized capital is formed from the contributions of founders and divided into shares of equal value. A share represents a security certifying ownership rights, voting power, and the right to dividends. All shares in Ukraine are issued in dematerialized (electronic) form and recorded in the central depository system.
• Limited liability. Shareholders do not risk their personal property; their liability is limited to the amount they invested in shares.
• Free transferability of shares. Shares can be freely transferred. In public JSCs, shares are traded on the open market, while in private ones, circulation is restricted among a limited group of owners.
• Continuity. A JSC exists independently of changes in its shareholders — ownership transfers do not affect the company’s legal existence.
• Corporate governance. The governance system includes the general meeting of shareholders, supervisory board (or board of directors), and executive body.

Types of Joint Stock Companies

Ukrainian law recognizes two main types of JSCs:

• Public Joint Stock Company (PJSC)
• Private Joint Stock Company (PrJSC)

Before 2009, Ukrainian law used the terms open and closed joint stock companies. Following the reform, open JSCs were transformed into PJSCs, and closed JSCs into PrJSCs.

Public Joint Stock Company (PJSC)

Shares of a PJSC are offered to an unlimited number of investors and may be freely traded on stock exchanges. PJSCs must disclose detailed financial information, publish audited reports, and comply with strict transparency standards. There are no limits on the number of shareholders, and the sale of shares cannot be restricted by the charter.

Private Joint Stock Company (PrJSC)

Shares of a PrJSC are distributed among a limited circle of persons and are not offered publicly. Share transfers are often subject to preemptive rights of existing shareholders. PrJSCs face less stringent disclosure requirements and are typically owned by a smaller number of investors.

Comparison of PJSC and PrJSC:
Public companies are more regulated and transparent, designed for attracting public investments. Private ones are flexible, suitable for smaller groups of shareholders or family businesses.

Requirements for Establishment

A JSC may be founded by one or more individuals or legal entities.

The minimum authorized capital must equal at least 200 minimum wages at the date of registration — approximately ₴1.6 million (as of 2024).

Contributions can be made in money or property. All shares of the first issue must be distributed among the founders. At the time of registration, at least the legally required portion of the capital (previously 50 %) must be paid. The company name must indicate its form — “PJSC” or “PrJSC”.

Advantages and Disadvantages

Advantages:

• Ability to raise large-scale capital through share issuance;
• Limited liability of shareholders;
• Business continuity regardless of ownership changes;
• Liquidity — shares can be sold or traded relatively easily.

Disadvantages:

• Complex regulation and mandatory disclosures;
• Risk of ownership dilution and conflicts between shareholders;
• Lengthy and formal registration or liquidation procedures;
• High transparency and state oversight requirements.

Establishment Procedure

1. Founding decision. Founders hold a meeting (or adopt a sole decision), approve the charter, and elect management bodies.
2. Formation of capital and issuance of shares. Founders contribute their capital in exchange for shares.
3. Depository agreement. The company signs a contract with a licensed securities depository, as all shares must be issued electronically.
4. State registration. The company is registered in the Unified State Register as a legal entity after submission of required documents.
5. Registration of share issue with the NSSMC. The National Securities and Stock Market Commission of Ukraine (NSSMC) registers the share issue and the report on its results.

For PJSCs, an additional step — listing on a stock exchange — is required before public trading begins.

Corporate Structure and Governance

Ukrainian law allows two models of corporate governance:

• Two-tier model: general meeting → supervisory board → executive board (management).
• One-tier model: a board of directors combining supervisory and executive functions.

The general meeting of shareholders remains the supreme body.
The corporate secretary coordinates governance procedures, prepares meetings, and ensures compliance. Financial control is conducted by independent auditors. Large PJSCs also form committees (audit, remuneration, appointments, etc.).

Shareholder Rights and Electronic Meetings

Each shareholder has the right to:

• participate and vote at general meetings;
• receive dividends;
• access company information and financial statements;
• exercise preemptive rights to purchase newly issued shares;
• demand that the company buy back their shares in certain cases (e.g., reorganization).

Since 2024, Ukrainian law allows electronic general meetings with secure online registration and voting via qualified electronic signatures. Such meetings have full legal validity and enhance participation for investors located abroad.

Corporate and Shareholder Agreements

A corporate agreement (shareholders’ agreement) is a contract among shareholders regulating how they will exercise their rights — for instance, voting arrangements, restrictions on share transfers, or dispute-resolution mechanisms.

These agreements help prevent conflicts and clarify cooperation rules among owners. The current Law of Ukraine “On Joint Stock Companies” explicitly authorizes such contracts for both public and private JSCs. Their terms are binding and may remain confidential.

Issuance and Management of Securities

A JSC issues shares — either ordinary or preferred:

• Ordinary shares provide voting rights and dividends depending on profit.
• Preferred shares (up to 25 % of capital) offer fixed dividends and liquidation preference but usually lack voting rights.

The company may also issue corporate bonds or other securities (options, warrants) as allowed by law.
All securities are recorded in Ukraine’s depository system, ensuring transparency and investor protection.

For PJSCs, the NSSMC oversees disclosure, reporting, and significant-event notifications. Shares may trade publicly only after listing on a recognized exchange.

Shares of PrJSCs are not publicly traded; they circulate privately, and other shareholders have preemptive purchase rights.
A JSC may repurchase its own shares (up to 10 % of capital) for consolidation or cancellation, provided the general meeting approves it.

Legal Framework

• Law of Ukraine “On Joint Stock Companies” No. 2465-IX of July 27, 2022
• Commercial Code of Ukraine (chapter on business companies)
• Regulations of the National Securities and Stock Market Commission (NSSMC)

Joint stock companies remain a cornerstone of Ukraine’s corporate system — driving investment, developing the capital market, and ensuring transparency and accountability of large enterprises.