Niniejszy artykuł przygotował Andrii Plyta, stażysta Kancelarii RKKW – Kwaśnicki, Wróbel & Partnerzy w ramach unikatowego programu dla najzdolniejszych studentów uczelni we Lwowie – „LEOPOLIS FOR FUTURE”, o którym więcej można przeczytać pod tym linkiem.
Ukraine is ranked 76 among 190 economies according to the report “Ease of Doing Business” prepared by the World Bank[1]. It is the highest position of Ukraine in the report’s history.
Ukraine faces a rapid process of changes of law that aims to attract foreign investors. The most significant one is introducing a new law on additional and limited liability companies (LLC) that entered into force on 17 June 2018[2]. In this article, I would like to point out five the most important changes in LLC law that may be important for foreign investors in Ukraine.
Firstly, the number of shareholders of the LLC is not limited anymore. Before amending of regulations Ukrainian LLC could not have more than 100 members. It was a big challenge for some of the companies, especially when it came to transforming a joint-stock company into a limited liability company because the Ukrainian law does not impose any restriction on a number of shareholders in the joint-stock company.
Secondly, the scope of compulsory information in a company deed is decreased. According to the new legislation, a company deed should include the following:
- the full and abbreviated (if any) name of the company;
- the bodies of management of the company, their competence, the procedure for making decisions;
- the procedure for entering and exit from the company.
Before the new law came into force, a company deed must have also contained information on an authorized capital, list of shareholders and registered seat of a company. Therefore, a company deed had to be amended each time when any of these was changed, what involved additional measures, time and costs.
Thirdly, a supervisory board is established in the LLC. The supervisory board will replace the audit committees that exercised supervisory duties in these companies previously. The audit committees did not yield satisfying results though and a lot of companies used private auditing firms instead. Under the new law, the main tasks of a supervisory board is to control and regulate the activities of the management board. The supervisory board may have a right to elect members of the management board, suspense or terminate their powers and regulate the amount of their remuneration. However, it is a non-mandatory body.
Fourthly, there is a new order of making a resolution in the general meeting. According to new law a resolution of the general meeting must be adopted:
- unanimously (approving the monetary value of in-kind contributions, redistributing profit or covering loss, creating new bodies, acquiring a stake);
- 3/4 (amending the statute, changing the size of the authorized capital, decision-making on separation, merger, division, joining);
- by a majority of votes (other matters).
Lastly, the law on LLC provides changes to the procedure of participating in the general meeting. The general meeting of shareholders now may be held by means of a teleconference, video conference or other means of electronic communications, provided that each participant can participate simultaneously with the others in the discussion and voting procedure.
Also, this new mechanism of voting in absentia was introduced although it can only be used when the resolution is on a matter included in the agenda of the general meeting. If the company has only one shareholder, decisions on issues that fall within the competence of the general meeting, now can be accepted by this shareholder individually and made out by a written decision, while before there were no regulations on that whatsoever.
[1] Ease of Doing Business in Ukraine https://tradingeconomics.com/ukraine/ease-of-doing-business
[2] The Law of Ukraine No 2275-VIII on Limited Liability Company and Additional Liability Company, Feb. 6, 2018 http://zakon3.rada.gov.ua/laws/show/2275-19.
