This article will describe the whole registration process of a Ukrainian Limited Liability Company, including all requirements and useful tips from practicing lawyers.
With the adoption of the new Law of Ukraine "On the Limited Liability Companies and Additional Liability Companies" the regulation of LLCs' activities got new approaches and became more clear. In general, the norms of this Law are more dispositive. It means that they allow shareholders to manage an LLC at their discretion. Certainly, some imperative norms remained (norms that restrict something or make it obligatory). For example, there are determined requirements for the content of the charter of the company, etc. Another positive side of the mentioned Law is that it regulates the conclusion of a corporate agreement enabling shareholders to agree on their actions about the company management, for instance, on voting at the general meeting, and many other issues.
In Ukraine, individuals and legal entities can register an LLC in two ways. The first one is an offline submission of documents through the Administrative Services Center (Tsentr Nadannya Administratyvnykh Posluh), and the second one is uploading documents online through "Diia" (mobile app and web portal supposed for e-governance in Ukraine). In this article, we will explain the first way of company registration (offline one).
Thus, in order to register a company, you need to perform the following tasks:
1) Preparing the charter of the company. Here you have two options: to draft your own charter with some unique features or use a model charter approved by the Cabinet of Ministers of Ukraine. When drafting a charter, remember the requirements for its content. The charter should include:
- full and abbreviated (if applicable) Name of the company;
- the governing bodies of the company (at least general meeting of shareholders and director), their competence, the procedure for their decision-making;
- the procedure for shareholders to join or leave the company.
- the company's charter may contain other regulations that do not contradict the law.
2) Holding a meeting of founders of LLC (where a decision on the name, activity, address, and incorporation of the Company is made, the charter is approved and director, representative (if applicable), responsible for state registration, are appointed). Every decision made at the meeting should be outlined in the minutes of the meeting. In case if there is only one founder of the LLC, there is no need to conduct a meeting - the person or legal entity (depending on who is a founder) should draft a sole founder decision, which should include the same details as minutes of the meeting of founders.
If you are going to adopt a model charter for your company, the requirements for the content of the minutes of the founders' meeting and sole founder decision are extended. In such a case, the content in addition to the mentioned requirements should also include the following:
- the subject of the Company's activity;
- the amount of the founders (shareholders);
- the size of the authorized capital;
- the size of shares in the authorized capital of each shareholder;
- the method of contribution by the shareholders to the authorized capital (in cash and/or non-monetary form).
3) Filling out the application form on registration of a LLC (the application form number 2 approved by Order of the Ministry of Justice of Ukraine). The application form should include such information as:
- full and abbreviated (if applicable) Name and type of the company;
- information about the director, representative (if applicable), applicant, ultimate beneficial owner, shareholders;
- the size of the authorized capital;
- the list of codes of economic activity;
- type of taxation.
4) Drafting an ownership structure according to the form and requirements determined by the order of the Ministry of Finance of Ukraine "On approval of the Regulations on the form and content of the ownership structure". The ownership structure should include the following:
- Name of each ultimate beneficial owner (UBO) who can directly or indirectly influence the activity or decisions of the company;
- the size of shares in the authorized capital of each UBO (Each shareholder who has more than 25% of the share in the authorized capital is considered as a UBO);
- generally, the ownership structure is depicted graphically on the sheet of paper (A4).
After all the listed matters are completed, you should submit the following documents to the Administrative Services Center "ASC" (firstly, we will mention the list of documents for Ukrainian founders/residents):
1) a printed charter of an LLC with the signature of each shareholder that has to be certified by a notary (in case you are going to adopt a model charter, you just need to state that decision in the minutes of the founders' meeting or sole founder decision. There is no need to submit a physical copy of the model charter to "ASC", and no need for the model charter to be notarized;
2) minutes of the founders' meeting or sole founder decision with signatures of shareholders (If you are adopting the model charter, the minutes of the founders' meeting/sole founder decision has to be notarized);
3) application form number 2 on registration of an LLC;
4) ownership structure according to the form and requirements;
5) copy of the passport of each ultimate beneficial owner certified by a notary.
Non-residents should submit both the mentioned documents and some additional documents, which we will list further:
1) a copy of the passport (the passport must be translated into Ukrainian language, and the translator's signature must be notarized);
2) a copy of the Taxpayer Identification Code obtained in Ukraine).
Registering an LLC as a non-resident, take into consideration that you cannot appoint yourself as director of this company without having a work permit in Ukraine. Hence, you perhaps should think about appointing a nominee director, to manage your company while you will be getting your work permit.
Also, check the following requirements for company registration, and be sure that your LLC complies with them:
- LLC must have at least 1 participant (shareholder). Shareholders can be individuals and legal entities (both national or foreign). There is no limit to the maximum amount of shareholders.
- Each company must have a legal address registered in Ukraine. Generally, it is an office of a company, and all correspondence is carried on there.
- The amount of the authorized capital can be formed with only 1 UAH, and there are no requirements about the maximum size for this amount. Based on the experience of registering an LLCs, it is better to establish at least 10 000 UAH as the amount of your authorized capital. Because, if the amount of the authorized capital is less, this may cause various checks of your LLC for lawfulness by the state. (For example, these checks may occur when opening a bank account, and slow down the opening procedure).
- An LLC is governed by the: General meeting of shareholders (the main decision-making body) and the director/board of directors (executive body, which can manage day-to-day tasks of the company and make decisions that are not attributed to the authority of the general meeting). Also, you can integrate some optional bodies, for example, the supervisory board.