Committee on economic policy recommends the Parliament to approve draft law on limited and additional liability companies in principle

Information Department of the Verkhovna Rada of Ukraine Secretariat
02 June 2016, 10:08

At reconsideration of the document (№4666) it was said that in Ukraine there are almost 500 thousand LLC (43% of all legal entities Ukraine), compared to 16 thousand joint stock companies, while LLC goes on to be governed by outdated provisions of the Law of Ukraine "On Business Associations " of 1991.

It was also noted that the draft law  will have a positive impact on these processes.

Deregulation:

abolition of legal restrictions that allow unfair  parties to block the activity of the company;

elimination of requirements for the maximum number of participants;

removing restrictions that do not allow the company to convert the obligation to share in the company.

Improvement of corporate governance:

Introduction of  maximum discretionary corporate governance (the principle according to which the parties freely dispose of their material rights);

introduction of flexible thresholds for decision making by the general meeting of participants;

introduction of a corporate agreement between the parties.

Improvement of investment climate:

introduction of management responsibility of the company;

introduction of legibility institute and legal interest;

the introduction of exclusion of participants;

introduction of  the obligation of society to pay dividends within a certain period.

Participants also pointed out that the adoption of such a law shall be essential for economic subjects and participants as it shall contribute to the protection of minority members with a of flexible regulation and prevention raider schemes. Also, a law has to impact improving of investment climate in Ukraine, creating jobs and, consequently, increase revenues to the state budget of Ukraine.