According to the Federal law on joint-stock companies, they are obliged to form reserve Fund and to reflect the conditions of its formation and use in the Charter. The reserve Fund shall be not less than 15% of the share capital of the company, and annual contributions to it should be at least 5% of net profit. However, the decision of the shareholders of the Fund and contributions to it can be increased. Once the reserve Fund reaches the minimum value required by law, deductions can be stopped.

The reserve Fund could be formed in the limited liability company. But, unlike the JSC is not obliged to do this. It is his right. The legislation of the Russian Federation determined that by increasing or decreasing the authorised share capital of the company respectively increases or decreases the minimum size of the reserve Fund.

The right to dispose of the reserve Fund are vested exclusively in the Board of Directors or the Supervisory Board. If at the end of the year the company received a loss of part of the reserve Fund, or the Fund is fully directed on repayment of losses.

Theoretically, any legal entity on their own may create a reserve Fund and use the funds for social enterprise development, for the payment of dividends to replenish capital when there is not enough profit, and just for unexpected expenditures or in the event of crises. Save cash when you do this, be very reliable and available financial instruments. Experts suggest as the minimum size of the reserve Fund to take the monthly income of the enterprise, and as the maximum semi-annual. Too big the reserve Fund is unreasonable, the elimination of capital from the financial life of the company. As these funds must be frozen or kept in a safe but low-yielding assets, then the capital will not bring the desired income and defer the realization of financial goals.