Legal alerts



The dominating shareholder who directly or indirectly holds 95% or more common shares may exercise its squeeze-out right within 90 days from the day of acquisition of dominant control by submitting an irrevocable squeeze-out proposal demanding the Company’s minority shareholders and the Company to sell their shares.

Thus a settlement for the shares of the minority shareholders will be done through an escrow account.


At the same time, the minority shareholders get the sell-out right which is not limited in time and may be executed any time after the dominating shareholder has acquired a dominating control. Determination of shares price and further steps are similar to the squeeze-out procedure.

These both procedures may be excluded and not applicable in case the relevant provisions are stipulated by Charter of a PrJSC or General Shareholders' Meeting decision. 


The Law introduces the escrow bank accounts concept, well known abroad but the long-awaited and the new one for Ukrainian legislation. 

Thus an escrow agent (the bank which maintains the escrow account) may release funds from the escrow account only under the documents confirming the fulfillment of the conditions set out in the respective escrow account agreement. Throughout this time the escrow funds will be blocked in the escrow account, and neither the client nor the beneficiary may dispose such funds (unless otherwise is provided by the escrow account agreement).

The funds in the escrow account are neither subject to any enforcement or arrest procedure, nor included in the bankruptcy proceedings.

Also an escrow account agreement may only be terminated upon the beneficiary’s prior written consent.

It should be noted this concept may also positively affect the market, particularly to be applied by real estate and M&A transactions to ensure safe transfer of funds between the parties. 


The Law amends bank account pledge regulations. Thus a bank shall refuse to perform any transaction related to the pledged funds in case such transaction would decrease the balance of the account below the threshold set under the pledge agreement (“minimum threshold rule”).

The Law gives priority to the pledgee's direct debit instruction over any conflicting claims to the funds in the pledged account. The account maintenance agreement shall not be terminated without consent of the pledgee.

The pledgee is granted the right to get information about the funds on the pledge account. 

The above novelties are implemented to harmonize Ukrainian Legislation with the EU Laws, particularly to secure shareholders’ rights. The Law will make M&A and real estate transactions more risk-balanced and safe for all parties.






                  Vitaliy Patsyuk,                            Yuliya Podolska,

                        Partner                                  Senior Associate

                 KPD Consulting                             KPD Consulting 






                 Vladyslav Kysil,                            Mykhailo Semka,

                      Partner                                        Associate

                KPD Consulting                             KPD Consulting 

Should you have any questions with respect to above or require any additional information, please do not hesitate to contact our Corporate law and M&A, Tax law Practice: Mr. Vitaliy Patsyuk         ( or Real Estate and Construction Banking & Finance Practice: Mr. Vladyslav Kysil ( We will be pleased to assist You.

The information contained in this overview is not intended to provide legal advice and should not be relied on or treated as a substitute for specific advice.

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