NEW LAW FOR LLC
Constituent documents (charter)
Under the Law the right to define most important aspects of management the Company and circulation of shares was granted to the participants, e.g. the right to set at the participant’s own discretion that:
• any sale, disposal and/or a pledge of the shares shall be subject to the approval of all participants of the Company;
• any material transactions and transactions with the affiliated parties shall be subject of approval of appropriate Company’s body and under appropriate procedure;
• a preemptive right of participants to acquire the participation interest in authorized capital of the Company shall be used and protected in the way as specified in the Company’s charter;
All such rules shall be provided for by means of introducing appropriate regulation into the Company’s charter.
At the same time the requirement to indicate in the charter the amount of the authorized capital, participants’ names and an amount of participation interest (share) held by the participants is canceled.
The first version of the charter of any newly incorporated Company shall be signed by all participants (founders), all next versions of the charter and first version of the charter of the Company set up as the result of reorganization shall be signed by the, who voted for the adoption of appropriate version of the Company’s charter. The signatures of the participants shall be certified by the notary.
Some essential changes were introduced into the regulation of the Companies’ management bodies formation and operation, such as:
• cancellation the quorum for General Participants Meeting of the Company (minimum number of votes to be present at the meeting for recognition the meeting to be entitled to adopt the decisions);
• introducing detailed procedure of the adoption of decisions by General Participants Meeting of the Company by means of correspondence or poll;
• granting the right to the participants to set up Supervisory Board as the management board of the Company and freely choose the name for the executive body.
The Law directly defined that the agreement between participants of the Company on realization of the rights of participants (hereinafter the “Participants’ Agreement”) shall be entered into in written form and without any payments as the consideration, otherwise such agreement shall be deemed void.
As of the date of entering into force, the Law shall be applicable for all Companies registered in Ukraine, the provisions of the charters of such Companies, which are not in line with the Law shall be applicable in a scope that is in line with the applicable legislation as of the date of entering into force of the Law. During one year the Companies shall harmonize the charters with the Law and may register appropriate new versions of the charters for free of state duty charge.
ENTERING INTO FORCE
The Law was officially published in Golos Ukrainy No. 50 dated March 17, 2018 and shall be effective from June 17, 2018 (three month after the date of official publication).
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Vitaliy Patsyuk Yuliya Podolska
Partner Senior Associate
KPD Consulting KPD Consulting
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