Corporate contracts: new opportunities

Corporate contracts: new opportunities

One of the significant changes that will appear after the reform into an LLC is the introduction of new contractual designs. It should be noted that the new legislation significantly expanded the powers of participants in limited liability companies and created a legal field in which they can regulate corporate relations not at a conceptual, but at a contractual level.

In practice, a lot of situations occurred when the disagreements among the LLC participants as well as the lack of legislative regulation of certain issues blocked the activities of the company. Such hopeless situations not only caused losses for the company itself, but also directly negatively affected the interests of participants who could not sell the share, leave the company and receive adequate compensation for the value of their share or receive their dividends.

Do not forget that global trends in the desire of countries to disclose information about beneficial owners of companies will not come by Ukraine. Using the confidentiality of corporate agreements, you can still actively participate in making important decisions in the LLC while owning a minimum share in the authorized capital.

So, the possibility of concluding the following contracts is provided for:

1. Corporate agreement: 

subject: obligations of the parties to exercise rights and powers in a certain way or to refrain from their implementation (for example: the conditions or the procedure for determining terms on which the participant has the right or obligation to acquire or sell a share in the authorized capital of the company (part thereof), as well as determine the conditions when such a right or obligation arises, abstain from voting on specific issues or vote as directed by another participant).

requirements: written form, conditions of free-of-charge basis, prohibition for the obligation to vote in accordance with the instructions of the company’s management bodies.

opportunities:

  • The parties may approve the procedure for voting at the general meeting;
  • Identify circumstances permitting or prohibiting the alienation of shares; terms and price of sale;
  • Establish the conditions for determining the candidacy of the director, his appointment/change;
  • Issuance of an irrevocable power of attorney by a party of the agreement to ensure the fulfillment of terms of such a transaction (can only be canceled by the consent of the attorney or exclusively in cases provided for in such a power of attorney);
  • Formalize the obligation to refrain from exercising the right to withdraw from the company in certain circumstances;
  • Oblige to vote for the payment of the value of the participant’s share when he leaves the company with certain property;
  • Formalize the obligation to refrain from the pre-emptive right to make an additional contribution;
  • Establish conditions for the nomination of candidates to the supervisory board, etc.

Lawyers and attorneys of Law Firm “Dominanta” will provide services for the development of individual corporate agreements based on the interests of the client and his individual wishes. In addition, we use all the new legislative opportunities provided by the LLC reform in order to organize the most loyal and flexible process of company management.

2. Founders agreement:

subject: the procedure for founding a company, the conditions for carrying out joint activities to create a company, the size of the authorized capital, determining the shares in the authorized capital of each of the participants, the terms and procedure for making contributions and other conditions.

requirements: written form + it is recommended to determine the duration of such an agreement (it is juridically valid until the day of state registration of the company, but exceptions are possible).

opportunities:

  • Preliminary approval of the assessment of the property contribution of participants;
  • Regulation of the procedure for making a contribution (setting the order of making contribution by participants; signing the act of acceptance of transfer of real estate on account of payment of a share by a participant at a certain date);
  • Settlement of distribution of the company registration costs;
  • Preliminarily approval of the key provisions of the charter.

Utilizing this agreement and taking into account many years of practice, specialists of the Law Firm “Dominanta” use the legislative opportunities to optimize business processes when creating a company.

3. Additional contribution agreement:

subject: the obligation of a participant of the company/third party to make an additional contribution in cash or non-monetary form and the obligation of the company to increase the size of the share of the participant in the authorized capital/to accept the third party in the list of participants with the relevant share.

requirements: written form, precise regulation of terms and amount of additional contribution.

opportunities:

  • Guaranteed acceptance of third parties as members of the company;
  • Determining the size of the future share in the company;
  • Possibility of prior assessment approval of property contribution to the authorized capital.

By ordering a service for the development of such an agreement from our attorney, you receive a legal guarantee to serve your interests. You will also be able to determine the value of your contribution and establish the conditions for acceptance into the membership.

4. Civil contract, employment agreement (contract) between an official * and the company:

*officials are: director (if the executive body is collegial – all its members); members of the supervisory board, other persons stipulated by the charter of the company.

subject: rights and obligations of an official and the company

requirements: an agreement with a member of the executive body or the supervisory board is signed by a person authorized by the general meeting.

opportunities:

  • The right to conclude a contract with the head of the company is provided;
  • Additional grounds for the dismissal of members of the executive body or of the supervisory board are provided: non-compliance with the requirements of “non-competition”, violation of official restrictions provided for by the charter, disclosure of trade secrets or confidential information.

5. Financial statement audit agreement:

subject: audit of enterprise financial performance.

requirements: It is concluded by a member of the company with an independent auditor (audit firm) that is not related to the property interests of the company.

opportunities:

  • control of cash flow/income during the activities of a limited liability company, monitoring the state of the company’s assets, identifying those responsible for the damage to the company.

6. Company termination agreement:

subject: conditions for the transfer of property, rights and obligations to legal entities-successors, the size of each participant’s share in the authorized capital of the legal entity – the legal successor or the conversion ratios of equity stakes into shares (if the legal successors are joint-stock companies), the composition of the bodies of legal entities – legal successors and other termination conditions.

requirements: they are not established by the law; the general provisions of civil law apply.

opportunities:

  • Settlement of property issues related to the termination of a company;
  • Determination of key conditions for future participation in legal successor entities.

Using the above-described contractual designs, our employees will provide you with a legal analysis of your situation and offer effective legal solutions.

The scheme of cooperation with our company is as follows:

  • CONSULTATION WITH AN EXPERT IN OUR OFFICE FOR THE LEGAL SITUATIONAL ANALYSIS AND DETERMINING THE LIST OF REQUIRED SERVICES
  • SIGNING A SERVICE CONTRACT WITH US
  • DEVELOPMENT OF A DRAFT AGREEMENT FOR A CLIENT
  • IF NECESSARY, NEGOTIATIONS WITH AN INTERESTED PERSON UNDER CONDITIONS OF THE AGREEMENT ARE CONDUCTED

We strive to create comfortable and favorable terms of cooperation for our customers, therefore we offer the following service packages:

The cost of services of Law Firm “Dominanta” in this area is from 2,000 UAH, depending on the amount of work.

The new Law on LLC provides investors with effective tools to protect their rights in many ways.

Experts of Law Firm “Dominanta” have practice of more than 15 years in building a business and corporate relations. Our team consists of practicing lawyers and attorneys specializing in civil, commercial, tax and labor law, who constantly keep abreast of the latest changes in the legal regulation of the corporate sphere. We use all the acquired skills and knowledge to develop not just standard contracts, but practical and effective agreements. The competitive advantage of working with us is that we guarantee the client an individual approach to solving tasks assigned. Our attorneys and lawyers will provide not only high-quality legal assistance, but will also find unique solutions for your specific situations.

We work for your success!