On 6 February 2018, the Parliament of Ukraine adopted Law No. 4666 "On Limited and Additional Liability Companies" (the "Law"). Taking into account significant overregulation of the limited and additional liability companies (the "Companies"), outdatedness and obscurity of many provisions of the Law of Ukraine "On Business Companies" and the Commercial and Civil Codes pertaining to the Companies, the adoption of the Law is a progressive step to improve the regulation of the Companies' establishment, operation and termination. Furthermore, the Law brings the Ukrainian company law closer to those of the EU and its member states.
The major novelties introduced by the Law are as follows:
- The number of the Company's participants is unlimited.
- The Company's participants have the right to conclude a corporate (shareholders') agreement setting up mechanics for exercising their corporate rights.
- The Company's participants can grant irrevocable powers of attorney delegating their corporate rights.
- Information on the Company's location, its authorized capital and participants does not need to be included in the Charter.
- The term for making contributions to the authorized capital by participants is reduced from a year to six months.
- Precise mechanisms for absentee and poll voting are introduced for decision-making by the Company's participants.
- It is legally permitted to establish a supervisory board as an effective tool to control and regulate the activities of the Company's executive body.
- The Law contains the concepts of substantial and interested party transactions and establishes rules for their approval and execution by the Company.
- The Companies termination and spin-off rules are expanded.
Also, the Law repeals and amends a number of norms of the Commercial and Civil Codes, the Law "On Business Companies" and other laws. The Law will become effective in three months after its signing by the President and official publishing, which are still pending.