Share or Authorized Capital of the Company in Ukraine.

We can provide you with legal services for increasing or decreasing the authorized capital of a Ukrainian company. We offer full legal support during this process.

What is the share capital of the Ukrainian company?

Share or authorized capital of Ukrainian LLC is the amount of financial funds or property that shareholders (owners) of the company intend to invest. The amount of authorized capital is to be decided before company registration in Ukraine and before the decision to establish a company has been approved. So, before the company is registered, future owners of the company shall decide how much to invest in the business. So the registered capital of the company in Ukraine is always declared before investing.

During the company formation process, this number is written in the register of companies. On one hand, this number of investments makes it possible to make the investment, like a transfer from a shareholder account to the company account, or give machines or other property to the LLC. On the other hand, such a number is a kind of obligation of a founder. It means that such a shareholder has to invest a certain amount, but not more.

So we can call the share capital of a Ukrainian company a declaration of intention to invest. Such an investment must be made within six months of its declaration. Also consider that such an investment is always free from taxes or duties. Articles of association (which are always approved by the founders) can determine other terms. Although if a shareholder did not make that investment during a certain period of time, such a shareholder is to be responsible only in front of other shareholders or the company itself. Responsibility for the timely payment of the investment may also be set out in the corporate agreement, which differs from the articles of association.

However, money is not the only asset that can be invested. Shareholders can also provide the Ukrainian company with needed equipment, property (including real estate), or rights for business purposes. Authorized capital can also be decreased. In such a way, the investment can be brought back to the participant. The minimum amount of authorized capital of a Ukrainian LLC is 0.01 UAH. The maximum amount of share capital is unlimited. So it is up to the participant to decide what amount shall be invested in their Ukrainian company.

How to increase the share capital of a Ukrainian LLC?

If you are an owner of a Ukrainian company, you can invest only the amount that you have previously declared to invest. If your business in Ukraine requires more investment, you can declare a new number. The first step is to call a general meeting of shareholders of the company. Consider that the decision about raising authorized capital must be approved by all the shareholders of the Ukrainian limited liability company. So, first of all, it is required to call a meeting of shareholders and make an appropriate decision. It is always much easier if the company belongs to the only shareholder. In case, if there are two or more participants, it is a must to decide an exact amount of additional investment from each one. Such a decision is called a protocol or minutes of the general meeting of participants. Also, such a document can determine a deadline for such an investment to be made. Minutes of the general meeting must be signed by all the shareholders and shall be certified by the notary. After that, this protocol can be submitted to the Ukrainian governmental registrar of companies, and the new amount of investment can be registered. The amount of a company’s capital is displayed in the Ukrainian registry of companies. Investment can be made only after all the legal procedures have been followed. Authorized capital can also be increased with the funds of a new shareholder. So, in the case, if the potential shareholder is ready to invest additional funds in the company, the share capital can be increased with such investment.

How to transfer money to a Ukrainian company?

After the registration of the amount of share capital has been completed, it is possible to transfer the investment to your company. The best way to transfer funds is a SWIFT transfer. The Ukrainian company shall have a corporate account in foreign currency (in most cases, USD or EURO) before you start the transaction. Better to send the amount in the same currency. But it is very important to understand that funds shall be sent from an account opened in the name of the shareholder. If a money transfer is made from another person, who is not a shareholder, such a transaction might be blocked by the bank. There is no requirement that you have to send the whole declared amount of investment. Share capital can be paid in parts. According to the legislation of Ukraine, it is forbidden to use borrowed funds to pay the authorized capital of a limited liability company. It is not compulsory to use the bank account in the country of residency or the country of citizenship of the shareholder.

How to use the authorized capital of a Ukrainian company?

Funds that have been transferred by the shareholders to the company are managed by the company. So the enterprise can use that money for the following business purposes:

purchase of equipment;
payment of wages;
payment to suppliers of goods and services;
the rental fee for an office, warehouse, or other real estate property;
payment of taxes or fees, including licenses or permits;

Generally, a company can use such funds for any needed payments. Even if it is needed to buy an apartment in Ukraine for a CEO or for other stuff of the company, it can also be done. So if you know that your business will require a certain amount of funds at the very beginning of activity, it is better to declare an appropriate amount of investment.