On June 17, 2018, the law came into force, which was intended to regulate the activity of limited liability companies with new responsibilities. We draw attention to the fact that, in accordance with paragraph 3 of the final and transitional provisions of the legal act, the legislator obliges owners of all the companies in the case of adoption of the statute in a new edition to bring it in accordance with the new law, and also provides a term for 1 year to “complete” in the old charters but still register the updated charters, guided by those points that do not contradict the current legislation, after the entry into force of the new law. According to statistics, about 1.2 million legal entities are registered in the state register, while half of them carry out entrepreneurial activities in the form of limited liability companies (limited liability companies), therefore, the services of a lawyer to bring the charter of limited liability companies in accordance with Changes are a very topical issue.
Consider the key provisions that have changed and the possible practical implications for limited liability companies.
The law significantly reduces the mandatory list of information specified in the statute. So in the new charter adopted in 2018, the mandatory information is:
As before, there is no direct prohibition to include in the text of the statute information about the list of participants and the size of their shares in the authorized capital, the size of the authorized capital and the address of the legal entity. These questions are left to the discretion of the owners of the company. In our opinion, everything must depend on the specific subjective factors of the enterprise and the relations between the participants. Usually, in order to facilitate registration actions in the future, which are related to address changes or the size of the participants’ shares, in case of not including these information in the statute, only the protocol (corresponding agreements) and the card (application) will be required to be submitted to the registrar. As a result, state registration of changes, without deciding to approve the statute in a new edition. At the same time, the adoption of the charter in the new edition is not a complicated and costly matter, but the fact that when changing the surnames of the participants and the size of their shares, it is necessary to change the charter further – at least somewhat complicate the possible unlawful encroachments on corporate rights and interests.
The law provides in more detail the pre-emptive right of the members of the partnership to acquire the share of another participant and the procedure for enforcing foreclosure on the share of the participant in the company in comparison with the old law “On Business Associations”. In our opinion, the details of the procedure for committing certain actions in such procedures is a positive innovation. After all, in practice there were cases as difficulties in the exit of a participant who had a desire to get his share of money and retreat it in favor of another participant, and not understanding of the state executors what actions to perform when forcing the foreclosure of the property of the debtor in the form of a share in the authorized capital partnership There was no clear procedure for selling corporate rights within the enforcement proceedings. Thus, the law states in particular, if none of the participants within 30 days from the date of receipt of a written notice of the intention of the participant to sell their share has not written in writing about its intention to take advantage of the preferential right, it is considered that such a participant has given its consent to the sale of the stake on the 31st day from the date of receipt of the written notice. A similar approach is applied in the case where the public or private executor has notified the partnership of its intention to charge a shareholder of the partnership (debtor) and sends a resolution on the imposition of the arrest on a share. The Company must, within 30 days from the date of receipt of such notice, provide the information necessary for the calculation of the value of the debtor’s share. Subsequently, the executor establishes the value of the debtor’s share and invites other members of the partnership to acquire it. If the company fails to fulfill its obligations to provide financial information for determining the value of the debtor’s share, or nobody will take advantage of the right to purchase it – the share is transferred for auctioning in the general order. Taking into account the introduction of the institution of private executives and the establishment of clear deadlines in the compulsory implementation procedure, the number of lots in the form of corporate rights in the companies on the Electronic Trading System by the arrested property will significantly increase.
Eliminated previously existing restrictions on the quantitative composition of participants (100 persons) of the company. After changes, the minimum number of participants is one, and the maximum is not limited. There was also a removal from the civil law clause that a person may be a member of only one limited liability company with one participant. We consider such changes to be positive, since they do not restrict the constitutional right to engage in entrepreneurial activity of a citizen, who is the only participant in several societies, the purpose of which is the creation of various business spheres.
The new law reduces the term for soliciting lenders to a company in connection with the decrease of the authorized capital, this term now is 30 days and is deducted from the moment of receipt of a written notice.
Establishing a new order of exit of the participant from the partnership. At any time, without the consent of other participants, only a participant can enter, the share of which in the authorized capital of the company is less than 50 percent. In relation to the participants whose share more than half of the authorized capital – may leave the partnership with the consent of other members of the partnership.
Under the new law, as well as the oldest supreme body of the company are the general meeting of participants. The possibility of establishing a supervisory board is foreseen, for the first time this institute was introduced to regulate the activities of a joint-stock company. The Supervisory Board within the competence of the company defined by the charter, controls and regulates the activities of the executive body of the company. As to the executive body of the company, it is stated that it can be a sole person (director) or collegial (the directorate, and the chairman is the general director). Established the unequivocal right of the director to act on behalf of the company without a power of attorney and the ability of the owners of the company to change the names as individual and collegial executive body at their request. We believe that the introduction of the Supervisory Board will not be relevant for the members of the companies, since most active business companies have a number of participants from one to three, for whom the creation of an additional education management company will only complicate the management of the enterprise.
According to the new law, new management tools of the company are introduced, namely, a corporate agreement and an irrevocable power of attorney. According to the corporate agreement there is a settlement of the relations between the members of the company on issues that arise or may arise during the implementation of such garlic their rights and obligations. In other words, the statute may provide for key mechanisms for the management and regulation of the basic legal relationships of the existence of a company, and in the corporate agreement certain nuances and peculiarities between the participants. Moreover, such features may be of a confidential and commercial nature, and in relations with contractors, the director of the company is not obliged to provide such an agreement for familiarization. For performance or enforcement of obligations of a participant that is a party to a corporate agreement, an irrevocable power of attorney may be issued, which is subject to a notarial certificate. Such power of attorney is valid until the purpose for which it was issued and can be revoked only with the consent of its representative or in the cases expressly provided for by this power of attorney.
The law provides for the possibility to provide in the statute provisions that determine the procedure for participation in general meetings by absentee voting and decision-making of the general meeting of participants through a survey. In case of absentee voting, the authenticity of the participant’s signature is certified by a notary public. The law sets restrictions on decisions made by the survey, in particular, they can not be taken by polling a decision on amending the statute, on liquidation of a company, merger, accession, exclusion of a participant in a partnership, and other decisions determined by the new law. The decisions received from the participant of the company are affixed, stored together and become the status of the protocol. Decision-making by means of a survey can be carried out with the use of electronic communications facilities specified in the charter. Such an innovation on the one hand is the answer to the challenge of transition to electronic document management, the conclusion of agreements on the use of the Internet network, and on the other hand, the possibility of forging the will of the participant of the company in solving key issues and possible “raider” occupations of enterprises.
Not all the short stories of the new Law on the LLC are listed above. Changes were made to the procedures for implementing the preemptive right of participants to pay additional contributions, the consequences of delaying the contribution of the participant in the company, the procedure for increasing and reducing the authorized capital, the withdrawal of members from the partnership, payment of dividends, the procedure for holding general meetings, regulated obligations of officials in the event of a conflict of interest, limitation of the executive body when entering into significant transactions and transactions for which there is an interest.
Separately, it is necessary to draw the attention of colleagues of lawyers, secretaries of enterprises and accountants on imperfect technique of norm creation in the new law. Very badly perceived application of the law in the legal category, which determines the procedure for making decisions by the general meeting of the members of the partnership, namely, the decisions that are taken “unanimously” are defined as decisions that are adopted “unanimously”. In practice, the word – unanimously practically not used in the minutes of the general meeting. Though taking into account the provisions of the interpretative dictionaries and the rules for writing the Ukrainian language, the law is correct.
Corporate lawyers of our law firm, taking into account changes in the legislation in 2018 and personal wishes of the client, are ready to develop a unique draft statute and to conduct state registration of the charter of a limited liability company within 24 hours after your application!