{"id":319455,"date":"2021-03-07T19:07:59","date_gmt":"2021-03-07T17:07:59","guid":{"rendered":"https:\/\/eba.com.ua\/?p=319455"},"modified":"2021-03-07T19:14:46","modified_gmt":"2021-03-07T17:14:46","slug":"charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed","status":"publish","type":"post","link":"https:\/\/eba.com.ua\/en\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/","title":{"rendered":"[:en]Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed[:]"},"content":{"rendered":"<p><\/p>\n<p><em><span lang=\"EN-US\">Author: <a href=\"https:\/\/hillmont.com\/pr\/corporate-and-ma\/sergii-regeliuk\" target=\"_blank\" rel=\"noopener noreferrer\" data-auth=\"NotApplicable\">Sergii Regeliuk,<\/a> Senior Associate at Hillmont Partners<\/span><\/em><\/p>\n<p><a href=\"https:\/\/hillmont.com\/wp-content\/uploads\/Hillmont-Partners__Amendmends-to-LLCs-and-ALCs-Charters_-Legal-Ale....pdf\">Download in pdf<\/a><\/p>\n<p>On February 27, 2021, Law \u2116 1183-IX on Amendments to the Commercial Code of Ukraine to Eliminate Legal Conflicts in the Requirements to the Charters of Limited and Additional Liability Companies entered into force.<\/p>\n<p>The law eliminated the conflict between the Law on Limited and Additional Liability Companies and the Commercial Code in terms of mandatory requirements for the charters of LLCs and ALCs, which arose from the fact that the Commercial Code required the indication in the constituent documents of the concerned companies its authorized capital, while the Law on Limited and Additional Liability Companies did not.<\/p>\n<p><strong>Background<\/strong><\/p>\n<p>The old Law on Commercial Companies and the Commercial Code required a large amount of information to be specified in the charters of LLCs and ALCs. In particular, the charter had to indicate the list of participants of the company and the size of their shareholding. In practice, this meant that after the acquisition of a share in the authorized capital of the LLC, the new owner had to obtain additional approval from the general meeting to make the appropriate changes to the charter.<\/p>\n<p>In 2018, the Law on Limited and Additional Liability Companies came into force. One of the progressive innovations of the Law cut the list of information to be defined in the charters of LLCs and ALCs. After this, in the charter it was only necessary to specify<\/p>\n<ul>\n<li>the name of the company;<\/li>\n<li>management bodies, their competence, decision-making procedure; and<\/li>\n<li>procedure for joining and leaving the company.<\/li>\n<\/ul>\n<p>In accordance with the transitional provisions of the new Law on LLCs, the provisions of the old Law on Commercial Companies governing LLCs and ALCs became invalid.<\/p>\n<p><strong>Revealed Conflict<\/strong><\/p>\n<p>However, in due course of running business, lawyers soon discovered that legislators, deliberately or not, had forgotten to exclude the old requirements for the charters of LLCs and ALCs from the Commercial Code. Thus, the Commercial Code still has requirements to indicate a company\u2019s participants and their shares in a charter, the amount of authorized capital, the purpose of economic activity, etc. (Article 57; Article 80, of Article 82 of the Commercial Code). The negligence of the legislators led to a conflict between the provisions of the new Law and the Commercial Code in terms of requirements for the charters of the aforementioned legal entity types.<\/p>\n<p>The old Law on Commercial Companies and the Commercial Code required a large amount of information to be specified in the charters of LLCs and ALCs. In particular, the charter had to indicate the list of members of the company and the size of their shares. In practice, this meant that after the acquisition of a share in the authorized capital of the LLC, the new owner had to obtain additional approval from the departing participants to convene a general meeting and vote for the appropriate changes to the charter. Needless to say, such a drawback created some bad faith practices to seize the opportunities created by it.<\/p>\n<p><strong>Solution<\/strong><\/p>\n<p>Fortunately, the latest legislative amendments excluded from the Commercial Code the provision on reflecting the size of the shareholding of participants in the authorized capital in the constituent documents of the concerned LLC or ALC. Moreover, the new edition of Part 4 of Art. 82 of the Commercial Code stipulates that the list of information which must be contained in the charters of LLC and ALC companies is determined exclusively by the Law on Limited and Additional Liability Companies.<\/p>\n<p><\/p>","protected":false},"excerpt":{"rendered":"<p>Author: Sergii Regeliuk, Senior Associate at Hillmont Partners Download in pdf On February 27, 2021, Law \u2116 1183-IX on Amendments to the Commercial Code of Ukraine to Eliminate Legal Conflicts in the Requirements to the Charters of Limited and Additional Liability Companies entered into force. The law eliminated the conflict between the Law on Limited [&hellip;]<\/p>\n","protected":false},"author":4489,"featured_media":319458,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false},"categories":[24,23],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed - European Business Association<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed - European Business Association\" \/>\n<meta property=\"og:description\" content=\"Author: Sergii Regeliuk, Senior Associate at Hillmont Partners Download in pdf On February 27, 2021, Law \u2116 1183-IX on Amendments to the Commercial Code of Ukraine to Eliminate Legal Conflicts in the Requirements to the Charters of Limited and Additional Liability Companies entered into force. The law eliminated the conflict between the Law on Limited [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/\" \/>\n<meta property=\"og:site_name\" content=\"European Business Association\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-07T17:07:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-03-07T17:14:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/eba.com.ua\/wp-content\/uploads\/2021\/03\/Hillmont_Partners_07032021.png\" \/>\n\t<meta property=\"og:image:width\" content=\"400\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Katia Chaikovska\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Katia Chaikovska\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/\",\"url\":\"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/\",\"name\":\"[:en]Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed[:] - European Business Association\",\"isPartOf\":{\"@id\":\"https:\/\/eba.com.ua\/#website\"},\"datePublished\":\"2021-03-07T17:07:59+00:00\",\"dateModified\":\"2021-03-07T17:14:46+00:00\",\"author\":{\"@id\":\"https:\/\/eba.com.ua\/#\/schema\/person\/591c0ae4ce3e3490f70325dfb642ac52\"},\"breadcrumb\":{\"@id\":\"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/eba.com.ua\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"[:en]Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed[:]\",\"item\":{\"@type\":\"WebPage\",\"name\":\"[:en]Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed[:]\"}}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/eba.com.ua\/#website\",\"url\":\"https:\/\/eba.com.ua\/\",\"name\":\"European Business Association\",\"description\":\"We are looking for proactive business leaders, who shape the investment climate of Ukraine and ready to supervise the work of the largest and the most influential business-community of Ukraine \u2013 European Business Association!\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/eba.com.ua\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/eba.com.ua\/#\/schema\/person\/591c0ae4ce3e3490f70325dfb642ac52\",\"name\":\"Katia Chaikovska\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/eba.com.ua\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/59d91c5da250ea725c3c425585ff46fb?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/59d91c5da250ea725c3c425585ff46fb?s=96&d=mm&r=g\",\"caption\":\"Katia Chaikovska\"},\"url\":\"https:\/\/eba.com.ua\/en\/author\/katia-chaikovska-eba-com-ua\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"[:en]Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed[:] - European Business Association","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/eba.com.ua\/charters-of-llcs-and-alcs-two-year-long-corporate-ambiguity-fixed\/","og_locale":"en_US","og_type":"article","og_title":"Charters of LLCs and ALCs: two-year-long corporate ambiguity fixed - European Business Association","og_description":"Author: Sergii Regeliuk, Senior Associate at Hillmont Partners Download in pdf On February 27, 2021, Law \u2116 1183-IX on Amendments to the Commercial Code of Ukraine to Eliminate Legal Conflicts in the Requirements to the Charters of Limited and Additional Liability Companies entered into force. 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