The Verkhovna Rada of Ukraine passed the law on LLC

On 6 February 2018 the Verkhovna Rada of Ukraine by a majority of votes passed the Law No4666. The Law is aimed on improving regulation of relations on creation, operation and termination of limited liability companies and additional liability companies.

The adopted Law provides the following changes:

1.A possibility to form a supervisory board of LLC was introduced

The Law provides the participants of LLC for an opportunity to form a supervisory board and introduce the participation of independent members in it.

It is anticipated that the supervisory board will become an effective control tool of management, in particular, under the conditions of geodistance, linguistic and cultural barriers.

2.The restrictions on the maximum number of participants of the LLC were cancelled

Nowadays, the maximum number of participants of LLC can be 100 persons.

The adopted Law abolishes the mentioned requirements and does not limit the number of participants of the LLC

3.An opportunity to use the corporate agreements was provided

The Law regulates the issue of concluding a corporate agreement between the participants of the LLC and the regime of its regulation. According to corporate agreement the participants of partnership must exercise their rights and powers in a certain way or keep from their realization. For example, the parties to such agreements may establish duty to vote in a particular way at the general meeting, provide for special aspects of execution of participants` pre-emptive rights and procedure of shares alienation and etc.

4.The mechanism of share recovery in the charter capital was fixed

The Law established the special aspects of use pre-emptive rights of the participants to buy a share, which is subject to foreclosure, and its sale at the auction.

This Law is entering into force following signing by the President and after 3 months from the date of its publication, except for particular clauses.