Despite the war in Ukraine, the Ukrainian Parliament in the last months has been productive in adopting new legislation intended to support the post-war reconstruction of the country. For instance, on 27 July 2022, the Ukrainian Parliament adopted the Law of Ukraine “On Joint Stock Companies” that completely replaces its old version from 2008. The new Joint Stock Companies Law introduces several changes into the status of joint stock companies, limited liability companies and their shareholders in line with undertakings of Ukraine under the EU-Ukraine Association Agreement.
Amongst others, the following major developments are notable:
- the streamlining of corporate reorganisation procedures (e.g. mergers, acquisitions, spin-offs etc.) in line with Directive (EU) 2017/1132;
- the improvement of shareholder meeting procedures through increased flexibility allowing the casting of votes by electronic means in line with Directive 2007/36/EC;
- the permission to choose between a two or one-tier corporate governance model, the latter option being previously unavailable in Ukraine;
- the clarification of an officer’s liability for a violation of their fiduciary duties;
- the extension of the list of persons authorised to file a derivative suit on behalf of the company; and
- the introduction of record-keeping mechanisms in relation to the rights to equity of limited liability companies similar to those currently applicable in relation to marketable securities like stocks and notes.
The new Joint Stock Companies law comes into force on 1 January 2023 and improves the attraction of Ukrainian investments.
Click here to read other blog posts in this Ukraine legal developments series.