What will happen to a limited liability company in the near future?

Legislative regulation of the companies requires updating and bringing them into line with the needs of the present. Obviously, with this purpose, the Verkhovna Rada adopted the Law “On Limited And Additional Liability Companies”.

Law articles are general and apply to two types of companies – LLC and ALC. Only the last article indicate an additional responsibility of ALC-shareholders for the obligations of the company with their property at the same rate to the value of the deposit for all sizes.

 

What is new in the law, comparing with the current one?

First, the law does not limit the maximum number of founders and reduces the list of information that must be contained in the Charter. Required information includes:

  • The name of the Company (full and, abbreviated);
  • Governing bodies, their competence and procedure for decision-making;
  • Entry and exit order.

Indication of other information is voluntary.

The law introduces the concept of a corporate contract, the sphere of its regulation, form. Such an agreement may regulate the ways in which parties will carry out its corporate rights, their right and/or obligation to alienate or to acquire a share under certain conditions or in certain cases. It is also possible to consolidate the negative obligations in the contract (refrain from taking certain actions in the exercise of their corporate rights).

A corporate contract requires writing form. Such contracts are confidential. Unlike the provisions of the current law (edition, which entered into force on February 18, 2018), the law does not provide for a duty to notify the company of a corporate agreement. Moreover, given the fact that the entry into force of the new law cancels the norms of the current law in the part of the regulation of LLC and ALC, this obligation will be canceled, unless the law draft will be changed.

The new law allows the parties of corporate agreement to issue the irrevocable power of attorney. The features of such a power of attorney are its cancellation until the expiration of the term only in case of violation of the trustee’s duties. Otherwise, the principal only with the consent of the representative may cancel such a power of attorney.

The law changes and details the procedure for contributing by the shareholders. The one-year deposit term is reduced to six months, with the possibility to set an even shorter deadline in the Charter. In case of delay – the company gives the shareholder another term, but no more than a month.

In case of non-payment of the deposit during an additional term, the company may take one of several decisions: to exclude such shareholder, reduce the size of the authorized capital, carry out redistribution of the share or liquidate a company.

The process of increasing the authorized capital depends on the need to attract additional deposits. If the authorized capital increase without additional contributions, the ratio of the size of the share of shareholders does not change. In case of an increase due to additional deposits, the shareholders have the priority right to make an additional contribution. However, the Charter may establish a different procedure, including the absence of priority rights.
The new law divides the exit procedure for members with less than 50 % in the company and for those with 50 % or more.

The first does not require the consent of the company, and the second can only exit with the consent of the company.
The moment when a shareholder leaves the company is the moment of state registration of changes. In addition, the obligation of the company to pay a share, based on its market value, and not on balance sheet, is fixed.
In case of foreclosure of the share, the company is obliged to provide the executor with the information allowing to calculate the value of the share, as well as to provide the shareholder – the debtor and the executor access to the financial statements.

The company will be able to redeem shares only in case of formation of a reserve fund for this purpose.
Management bodies are a general meeting, supervisory board (creation is not obligatory) and executive body. In addition, the executive body is solely. The Charter may determine the collegiality of the executive body. You can only dismiss an executive body by appointing a new one.

We have some changes to the decision-making process of the company: issues are identified, decisions of which are taken only unanimously and with 75 % of votes. You can also make a decision by absentee voting or polling if all the shareholders voted for it.

In case of absentee voting, a shareholder who is not present at the meeting sends an expression of his will in writing with a notarized signature.

The polling procedure provides for the initiator to send all the shareholders a draft decision, and the shareholders send their request in writing in return. There is a list of decisions that can not be made through the polling procedure. The Charter may contain a requirement for the certification of signatures in this procedure.
If there is only one shareholder – instead of the protocol he issue a document called “Decision”.

The law determines the list of officials of the company, as well as the list of documents that the company must necessarily keep.

The concept of a significant transaction, as well as a transaction of which interest is concerned, and the necessity of their approval by the general meeting are fixed. The Charter may not determine such an order, and the relevant rules of law, in this case, do not apply.

Transitional provisions of the law provide for the release of companies from paying administrative fees in case of registration changes to bring the Charter into conformity within 1 year.

In general, the law contains a wider regulation on most issues of the company’s’ activity. However, the law provides quite a lot of opportunities to define some provisions in its Charter. The conclusion of corporate agreements allows detailing the rights and obligations of shareholders, as well as the procedure for action in certain cases.

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20/01/2022
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