On 12 May 2022, the Ukrainian parliament adopted the Law of Ukraine “On Amending Certain Laws of Ukraine on Improving the Mechanism of Counteracting Raids” (the “Law”), introducing new requirements and procedures to strengthen the current legal framework and effectively counteract raids and unscrupulous registration actions in Ukraine.
In particular, the Law lifts barriers to challenge the registration actions, omissions or decisions of registrars at the Ministry of Justice of Ukraine (MoJ) by clarifying the requirements for the form of complaints and extending the terms for submitting such complaints. Specifically, it is envisaged that a complaint should be filed:
- within two months from the day when a person learned or might have learned about the violation by the state registrar, but not later than one year from the date of the event;
- within one month from the day when a person learned or might have learned about the violation by the territorial bodies of the MoJ, but not later than six months from the date of the event.
The MoJ’s decisions rendered in the challenge proceedings will now have to be published on its official website within one business day.
The Law also aims to automate certain registration actions by allowing certain registration actions to be conducted without involvement of the registrars with the use of the electronic identification:
- For individuals - state registration and/or changes to information about an individual entrepreneur;
- For directors - changes in the registered office of legal entities, types of activities, contact details of legal entities, other changes, which do not require approval of the shareholders;
- For founders (shareholders) of legal entities - state registration of a legal entity based on a model charter, state registration of changes to the information about the legal entity requiring a decision of the legal entity's shareholder(s) (except for decisions regarding the amount of the charter (share) capital, the composition of the shareholders or the director of the legal entity) and state registration or deregistration of the decision on termination of the legal entity.
In addition, the Law stipulates that the minutes of the general meeting concerning the change of the company’s director shall be signed by all participants who voted for such decision unless more than ten shareholders have voted for such decision or otherwise is provided by the charter.
The specific safeguards against corporate raids in the agricultural sector are established as well. In particular, the deeds of termination of the agricultural land lease will now be deemed significant transactions by default and require to be approved by the entity’s general meetings to be valid. All these amendments shall allow fulfilling the law’s key objective to protect businesses and individuals from hostile takeovers and other undue practices while Ukraine’s registrars and public registers function in a limited capacity due to the martial law regime currently in place in Ukraine.
On 26 May 2022, the Law was published. It will come into force on 26 July 2022, except for the provisions on termination of the lease of agricultural land, rules for signing general meeting minutes, registration actions in automatic mode that will become effective on 26 September 2022.
