Unnecessary requirements for the statutes of the Limited Liability Company and the Additional Liability Company will be removed from the Commercial Code

The provisions on the need to indicate in the charter of limited and additional liability companies the list of participants in the company and the size of their shares will be removed from the Economic Code of Ukraine.

At its last meeting, the Verkhovna Rada Committee on Economic Development recommended that the Parliament adopt as a basis the draft Law of 18.05.2020 No. 3497 "On Amendments to the Economic Code of Ukraine regarding the elimination of legal conflicts in the requirements for the charter of limited and additional liability companies." Further revision of the project will take place in a simplified mode with a shortened deadline for submitting comments and proposals.

As a reminder, in June 2018, the Law "On Limited and Additional Liability Companies" came into force in Ukraine. One of the progressive innovations was a reduction in the list of information that should be indicated in the charters of LLC and ALC.

The old Law on Business Companies, among other things, required to indicate in the charters a list of participants and the size of their shares. In practice, this meant that after acquiring a share in the authorized capital of the company, the new owner had to additionally receive a positive decision of the general meeting of participants on amending the charter. And this requirement, the authors of the legislative initiative note, interfered with the normal circulation of shares, because there was a risk of blocking the decision to include a new participant in the charter by other unscrupulous members of the company.

In the new Law on LLCs and ALCs, only three categories of information were defined, which must be indicated in the charter:

1) full and abbreviated name of the company;

2) governing bodies of the company, their competence, the procedure for making decisions by them;

3) the order of entry and exit from it.

However, they forgot to exclude the old requirements for statutes from the Commercial Code! After the discovery of this collision, the Ministry of Justice of Ukraine even issued a letter of explanation (dated 07.06.2018 No. 6623 / 8.4.3 / 32-18), which recommended the use of the new law.

But, since the clarifications are not of a regulatory nature, some state registrars continued to refuse to register the charters of LLC and ALC, if there was no information about the composition of the participants or the size of their shares.

Now, if the Law is adopted as amended by its draft No. 3497, Article 82 (Constituent documents of a business company), the Economic Code will contain the reference rule: "The list of information that should be contained in the charter of a limited liability company and a company with additional liability is determined exclusively by the Law of Ukraine" On limited and additional liability companies ”.