What Is an Open-Ended Investment Company?

Based on the method of stock transfer, companies can be divided into closed companies and open companies. Companies can be open or closed, which is reflected in the company's articles of association and names.

Open company

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Based on the standard of stock transfer, companies can be divided into

An open-ended company has the right to issue shares through public subscription, and the right to freely sell these shares in accordance with this Federal Law and other legal documents of the Russian Federation. The number of shareholders of an open-ended company is unlimited.

A closed company only distributes shares among the company's promoters or within the scope of other pre-specified personnel. It has no right to sell its shares by public subscription. The number of shareholders should not exceed 50. If the number of shareholders of a closed company exceeds the limit specified in this paragraph, the company should be converted into an open company within one year; otherwise, the company shall perform liquidation in accordance with legal procedures.