The news about the adoption of this Law has attracted considerable attention, as far that most of the business associations in Ukraine exist in the form of limited liability companies, and by this moment the issue of the creation, operation and liquidation of such entities has been sufficiently regulated by the Civil and Commercial Codes of Ukraine, the Law Of Ukraine "On Business Associations”.
The Law of Ukraine «On Societies with limited and additional responsibility» will come into force on the 17th of June 2018, and part 2 of the article 23 of the Law of Ukraine «On Societies with limited and additional responsibility» - on the 17th of March 2019.
In connection with the adoption of the new law, significant changes have been made in the regulation of the activities of limited liability companies, in particular:
- The law provides cancellation of the limit of the participants in the Company (now no more than 100 people).
- Introduction of corporate agreements. A corporate agreement may provide conditions or a procedure for determining the conditions on which a participant is entitled or obliged to buy or sell a share in the authorized capital (its part), as well as to determine cases when such right or obligation arises.
- An important novelty of the Law has appeared to be the exclusion of information about the size of the authorized capital and the list of members of the Company from the list of information subject to mandatory consolidation in the charter. The first version of the charter must be signed by all members of the Company in a notarial form. Further editions of the charter may be signed by one, authorized by all members of the Company, person.
- Now, when creating a new Company, participants will be obliged to form the authorized capital of the company in full for 6 months from the date of state registration, unless otherwise specified in the charter (today this term is 1 year).
- The responsibility for delaying the deposit from the moment of registration of the Company strengthens, up to the exclusion of the participant of the Company having a debt.
- The law provides the possibility to increase the authorized capital of the Company not only at the expense of additional contributions of participants (as at present), but also at the expense of retained earnings. The law also sets deadlines for the participants to contribute their additional contribution - 1 year for participants and 6 months for third parties (previously, the deadlines should have been defined in the decision on the meeting).
- In addition, the Law substantially changed the procedure for reducing the authorized capital. The law establishes a period of 30 days during which the Company may contact the lenders who have been notified of the reduction of the capital.
- The law also provides the particulars of the participant's withdrawal from the LLC, in particular the participant whose share in the capital of the Company is 50 percent or more, may withdraw from the partnership with the consent of other participants, while the participant of the Company, whose share in the authorized capital of the company does not exceed 50 percent, may at any time withdraw from the partnership without the consent of the participants.
- The mechanism of absentee voting is introduced. In addition, the decision of the general meeting of participants can be taken by polling. The law establishes the peculiarities of holding a general meeting of the members of a Company having one participant.
- The new law establishes rules on significant transactions and transactions of which there is an interest.
- There is a fixed list of documents which the Company must keep.
Of course, these are just the main innovations we have drawn attention to. In general, the law provides for a significant layer of changes related to the activities of the LLC.