Legal basis for the formation and use of reserve capital
In accordance with paragraph 1 of Art. 35 of the Law on JSC, joint-stock companies are required to create a reserve fund in the amount provided for by the company’s charter, but not less than 5% of its authorized capital. The reserve fund of a joint-stock company is formed through mandatory annual contributions until it reaches the size determined by the charter of the joint-stock company. The amount of annual contributions is provided for by the charter of the joint-stock company, but cannot be less than 5% of net profit until the amount determined by the charter of the joint-stock company is reached.
