MODEL CHARTER OF LLC

HARMONIZATION OF CHARTERS WITH LAW

As already mentioned, requirement to harmonize the charters of the Company with the Law provisions is provided under the Law, and such requirement is concerning both own (paper) charters and model charters of the Companies. The "old" charters of the Companies, registered before 17.06.2018, could not comply with the Law by default, e.g. there are no, inter alia, appropriate provisions on power and decision making procedure for the general participants’ meetings, requirements and procedures on approval of the material transactions and withdrawal the company by the participants in such Charters do not contain, which should be indicated in the charter of the Company under the new Law.

It should also be noted that the state registration of the restated charters shall be free of administrative fee (around UAH 600) until 17.06.2019.

MODEL CHARTER. WHAT'S NEW?

The Decree, among the others, approved the model charter of the Company and the procedure for a transition to it by the Companies, which have been acted on the basis of the model charter before the Decree entered into force.

Among the most important changes introduced by the Decree, should be mentioned the option of the participants to deviate from the provisions of the model charter "by default" and make an "individual" model charter according to their needs. Therefor the participants submitting the registration documents in electronic form, can choose the appropriate provisions (options) of the model charter, approved by the Decree, at the same time "default" is also available. In the case of submission of documents for state registration of the Company, which carries out activity on the basis of the model charter, in a paper form, it is considered that the option "default" is chosen.

The Decree was officially published in Uriadovyi Kurier No. 82 of 27.04.2019 and came into force on 28.04.2019, except for some provisions provided by the Decree.

NONCOMPLIANCE OF THE CHARTERS WITH THE LAW AFTER 17.06.2019

In accordance with the Decree, the model charter, which was in force until 28.04.2019, shall be applicable for the Companies acting on basis thereof until the date of entry into force of the Decree and only until the moment when such Companies would be transferred to activity on the basis of its own (paper) charter or the model charter provided for by the Decree.

Noncompliance of the charter with the Law after 17.06.2019 may be a factor, which complicates the business activity of the Company and relations with counterparties and banking institutions, moreover, it could be a formal ground for declaration by the court as invalid.

Please also be informed, that the Company, which until 28.04.2019 acted on the basis of the model charter and until 18.06.2019, will not transit into the activity on the basis of the own (paper) charter or the model charter, provided for by the Decree, will be considered as transited on activity on the basis of the model charter "by default" provided for by the Decree from 18.06.2019.

Vitaliy Patsyuk

Partner

KPD Consulting

Yuliya Podolska

Senior Associate

KPD Consulting

Should you have any questions with respect to above or require any additional information, please do not hesitate to contact Mr. Vitaliy Patsyuk (v.patsyuk@kpdconsulting.com.ua) and Ms. Yuliya Podolska (y.podolska@kpdconsulting.com.ua). We will be pleased to assist You.