Results of the year: what brought the 2018th in the business?
In December, all people can be divided into two types: those who want to finish something before the end of the year, and those who have already postponed everything for the next one. In our opinion, December is the right time to look back and take stock of the year in business activities.
2018 is a year with a lot of changes in corporate regulation, often concerning the same relationship. But first things first.
At first, there was an agreement on the implementation of rights … (corporate?)
In February, amendments (1984-VIII, dated March 23, 2017), which introduced the concept of an agreement on the implementation of rights of shareholders in a limited liability company, came into force. And although the term “corporate agreement” was not formally introduced, the business community was well aware of the nature of these agreements.
Although formally Article 6 of the Civil Code has always allowed for the conclusion of any contracts, regardless of whether they are provided for by current legislation or not, the parties always place more hopes on the “legalized” contract.
The law also introduced the concept and made it possible to issue an irrevocable power of attorney. In the realities of Ukraine, its application raises many questions and does not inspire confidence at all, however, such a power of attorney is an essential attribute of shareholders of agreements in the common law system. And if in Ukraine the shareholder, who issued such a power of attorney, is necessarily “allowed” to the general meeting, his vote is also taken into account, then in the countries of the common system such a situation is impossible.
And if you thought that after February everyone rushed to enter into corporate agreements, then no, they did not. And there are several reasons for this.
First, the institution of a corporate agreement is still new for Ukraine. Therefore, not every shareholder understands their purpose, goals, advantages and opportunities.
Secondly, in February there was already signed and published the law, which after four months was destined to abolish innovations regarding the “agreement on the implementation of rights”, consolidate the concept of a corporate contract and liberalize the legislation on LLC and ALC as much as possible.
A new law on companies
On June 17, the Law “On Limited Liability and Additional Liability Companies” came into force (2275-VIII, February 6, 2018). What did the new law bring?
Simplification of many procedures, less dependence on the charter, the possibility not to indicate unnecessary information in it, management optimization, the possibility of using technologies (video conferencing) and a clearer exit procedure.
However, besides the wide possibilities at their discretion to regulate the company’s activities, conclude a corporate contract or sell a share without amending the charter, the new law brought many inaccuracies and questions, and some procedures may have complicated.
For example, to change the list of founders under the new law, it is not necessary to change the charter, involve the company, and the applicant is, for example, an alienator of a share.
However, such a procedure makes life easier only if the charter does not define a list of founders or if there is a conflict between the shareholder, who goes out, and the company.
In the case of a peaceful existence, instead of one registration action, several steps need to be taken: first, to change the list of the shareholders, and then to amend the charter. If earlier everything could be established by one minutes, then according to the new law, different applicants are provided for various registration actions.
The question of concluding a civil contract with the chairman of a collegial executive body remains ambiguous. If such a contract can be terminated (part 7 of article 39), then, obviously, it can be concluded. But nobody asked the fiscals about it. We are waiting for someone to ask the fiscals or the court.
There are many such questions in the law, but one should not expect an immediate answer to them. It takes at least several years to develop positions for the application of regulations.
The field of inspections was hot all year round: a smart moratorium and draconian fines from the Labor Services.
The law on the state budget for the outgoing year granted the Cabinet of Ministers the right to remove certain bodies, that are “ready” to apply a risk-oriented approach, from the moratorium/
And on December 18, 2017, the Cabinet approved such a list. Consequently, in 2018, we entered under the fear of the appointment of scheduled inspections of the SFS, SACI, eco inspection, medicines service, the State Food Consumer Service, the SSES, of a number of other bodies, but the main thing is Labor Services.
Implementation of the so-called “smart moratorium” at the end of last year actually led to its abolition, due to the rather wide list of bodies to which the moratorium did not extend.
But the partial abolition of the moratorium is not the worst. We at least know about scheduled inspections: we can check the plan for next year, we receive a message in 10 days and, accordingly, we have at least some time.
But the worst current “enemy” of business – the Labor Services does not warn.
And yet – they has a number of their own grounds for conducting inspection visits, the validity of which can be checked only in court. In addition they have a number of their own views on its special status, as well as on the powers of inspectors. And it is often only the court that succeeds in putting an end to or giving a substantiated answer in a dispute.
The September order of the Government to strengthen inspections in the field of labor relations has kindled fire even more, and news of several million’s fines become commonplace.
But the excessive freedom of the inspector can turn Labour Services into a serious punitive body. And this is not a risk oriented approach, but a way of filling the budget.
Therefore, follow the main changes in the legislation concerning the business environment, remember your rights and be able to protect them. And if the need arises – we will help.
Olesia Todoriuk
associate at Attorney at Law “Bachynskyy and Partners”
assistant attorney of Andriy Kavchuk, head of practice
corporate law and compliance]]>
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