On June 19, at the Legal High School Discussion Hub, a discussion on the outcome of the law enforcement of the new Law of Ukraine "On Limited Liability Companies" was attended by Sergiy Benediyuk, EVRIS Partner, Corporate and M&A Practitioner.
"The law as a whole is positive, but there are certain disadvantages".
The Law of Ukraine "On LLC" provided more tools for structuring relations in the middle of companies. Today it is the most common form of business in Ukraine. Small projects in which there is no sense to be structured abroad now exist in Ukraine as an LLC, for which corporate agreements are created in accordance with the law of Ukraine. Corporate agreement – an agreement between the parties, which is not a document for the registrar. During the discussion there was a question about which Sergіy shared his thoughts. So, does the partnership have to be one of the parties to the treaty?
"Quite often, in corporate contracts in the US, one company is one of the parties. In Ukraine, the law does not write such an opportunity right now. Evolutionary amendments will be made, practice will be formed, but the availability of such an instrument gives us a great field for action. Some things we can prescribe in the statute, duplicate by blocking certain decisions at the level of government. It is unlikely that we will be able to achieve the flexibility that the law of other countries has achieved over a century in a short period of time. "
Sergіy not only expressed his opinion on this aspect, but also shared with his colleagues and listeners his own experience in creating organizational documents for LLC.
"By creating corporate agreements, we refuse to include those provisions that may lead to inexplicable interpretation in the future. It is necessary to prescribe, duplicate the provisions in the statute, and to create auxiliary control mechanisms so that the contract is one that can be applied in order for it to work effectively at the level of the organization itself. The contract itself in Ukraine is not enough for this, therefore, in order to avoid misunderstandings, it is necessary to foresee some moments at the level of the statute and at the level of government. "
Finally, Sergіy advises prescribing the provisions in a very detailed manner, so that the court, in the event of disputes, could go clearly on the algorithms that are prescribed in the corporate agreement.
Summing up their speeches, the participants of the discussion came to the conclusion that the given norm is incomplete, therefore, it should be either eliminated or changed.
