Calling and running the shareholder’s meeting of Ukrainian company

We provide juridical and consulting services for calling and running a shareholders’ meeting of Ukrainian LLC. As corporate and company law of Ukraine is our main specialization, over the years we’ve earned a huge experience and the best solutions to call and conduct a general meeting of shareholders of Ukrainian limited liability companies. We can also act on your behalf at the meeting so it will not be necessary to visit Ukraine for this. We also provide qualified attorneys support in case of corporate conflict in Ukrainian LLC. 

Main features of Ukrainian LLC law on shareholder’s meeting

In case if you are a sole shareholder in a Ukrainian company, you don’t need to read this article in order to call and conduct the meeting of the supreme authority of such an entity properly. If you own 100% of the company’s capital, any decision signed by 100% shareholder is considered as called and conducted in a proper way. If there are 2 or more owners in your LLC, this information will be useful for you. In case if there is any misunderstanding or any conflict or any lawsuit between the part-owners of the company, this information will make you understand this very important issue on the Ukrainian corporation. If you are a shareholder, it is strongly recommended to check Ukrainian company data from time to time.

In Ukraine, the procedure of calling and running a shareholders’ meeting is defined by articles 32 and 33 of The Law of Ukraine “On Limited and additional liability companies”, which had been approved in 2018. Besides the Law, also the company’s charter or articles of association can define particular regulations for a certain corporation. But consider that anyway any statutes in the articles off association of Ukrainian company shall fully correspond to the law. Shareholders of Ukrainian LLC are called “Participants”, thereafter shares are named “Parts”. In Ukraine, shareholders officially are named as the owners of public or joint-stock companies that are not LLCs. In this article to avoid misunderstanding, we will use European and American versions and we will call a shareholder. The general meeting of shareholders of Ukrainian corporation is the supreme and the most powerful body of such a legal entity. Shareholders’ meeting, that is called and conducted properly, can take any decision on the company if there are enough votes. 

How to call the shareholders’ meeting of Ukrainian limited liability company?

The shareholder’s meeting of an LLC in Ukraine can be initiated by: 

  • CEO (or Director) of the company;
  • shareholder (s) of the company, that own 10% or more of the capital;
  • company’s supervisory board.

The general meeting of shareholders of the Ukrainian company is called by the CEO (also called director) of the company based on the request of an initiator. Company’s charter may determine another body authorized to call for a meeting, like a supervisory board or other. That is why it is very important to draft the charter of the Ukrainian company (called also the statute) properly. This is to be done before Ukraine company formation procedure and a skilled solicitor is required for this. Consider also that this is to be done by notifying each shareholder of the company in writing by sending the letter to each shareholder. The notification letter shall be received at least 30 days before the scheduled date of the general meeting of shareholders unless otherwise specified by the charter of the company. That means that it is necessary to send the notification letter at least 40 days before the estimated date of the meeting. Moreover, to have the proof that the shareholder was informed properly, it is necessary to send it by postal service that will give you a description of contents and quantity on a shipment waybill. The letter shall be sent to the address of shareholder’s residence. Consider that shareholder is obliged to inform the company on the address of residence (which is also mentioned in the register of companies of Ukraine). The company’s charter may institute a different way of notification.

The notification letter shall indicate the date, time, place, and the agenda of the meeting. In case if one of the topics of the agenda is the approval of the company’s article of association (charter), a draft of the proposed changes shall be attached to the notification letter.

Shareholders of Ukrainian LLC, that own 10% or more of the company, have the right to add other topics or issues to the agenda of the meeting. In this case, such a request is automatically included in the agenda of the general meeting. After sending the notification letter, it is prohibited to make changes to the agenda of the general meeting, unless 10% or more of shareholders requested to add other topics. The CEO of the company is obliged to notify the members of the company (on the changes to the agenda) at least 10 days before the scheduled date of the general meeting unless otherwise specified by the company’s charter. But consider that it is possible to make any changes to the agenda even during the meeting if this is approved by all the shareholders of Ukrainian company.

The Director of Ukrainian company is obliged to provide the shareholders of the company the access to the documents and/or information that might be important to take proper decisions during the meeting. Moreover, company’s CEO shall provide suitable conditions for that at the location (office) of the company during working hours unless otherwise provided by the company’s statute.

How to run a general meeting of shareholders of Ukrainian company?

The general meeting of shareholders shall run in accordance with the procedure practiced by The Law of Ukraine “On Limited and additional liability companies” and the articles of association of the company. Shareholders are able to participate personally or to send a representative (or an attorney) to the meeting. Such a representative shall have a properly certified power of attorney. In case if the power of attorney is issued outside of Ukraine such a document shall be certified (depending on the country) with apostille or legalized and also shall be officially translated in Ukrainian language. In case if you have to be present at the meeting of the owners of your Ukrainian LLC, it is not compulsory to travel here in case if you are not in Ukraine. Consider that such written authorization to represent or act on behalf of the company owner shall include certain words and phrases (to participate in the general meeting of shareholders of a certain company; to vote on any or on certain questions; to sign needed documents, etc). The meeting itself shall take place in one certain room or hall, which is mentioned in the invitation letter. The very first thing to di os to decide the chairman of the meeting. Usually, it is a major shareholder. Consider that the CEO of Ukrainian LLC can not be elected as the chairman of the meeting.

It is also possible to make a meeting by a video conference in a way that allows to see and hear all the shareholders at the same time. But in this case, at least one shareholder shall be present physically at the place (where the meeting is conducted) in order to sign a protocol (shareholder’s decision that is also called minutes of a general meeting). The protocol shall be kept in the way that records the course of the general meeting of participants and the decisions that being taken. The minutes shall be signed by the chairman of the general meeting or another person authorized by the meeting. Every shareholder of Ukrainian LLC who participated in the general meeting of participants shall sign the protocol. Another very important aspect is that decisions on issues that are not included in the agenda of the general meeting of shareholders can be approved only by 100% of all the shareholders. 

All the expenses for the preparation and conducting of the meeting shall be covered by the company. But in case if the general gathering of shareholders is initiated by a company shareholder, the costs of preparation and running shall be covered by such a shareholder, unless otherwise is decided during the meeting itself.

What is the percentage of votes required to approve the decisions on the Ukrainian limited liability company?

Well this is the most important part of being a shareholder of an LLC as the share is the right to get a profit from the company (during dividend payout) and at the same time, it is a right to manage the company and participate in taking the decisions. Only and exclusively the general meeting of shareholders of Ukrainian limited liability company can take decisions on the following:

  1. decide on the main ways of the company’s activity and business spheres;
  2. change the company’s charter;
  3. increase or decrease of the capital;
  4. approve the appraising of the cost of the property and/or goods and/or equipment that is to be contributed to the company by the shareholder;
  5. redistribute the shares between the shareholders (in the cases determined by LLC Law);
  6. elect and remove the company’s supervisory board (or members of the board), establish the amount of remuneration (salary and/or bonuses) to members of the company’s supervisory board;
  7. appoint, remove of CEO the company or members of the board of directors; establish the amount of remuneration (salary and/or bonuses);
  8. determinate the forms of control and supervision over the actions of the executive body of the company (CEO or Director);
  9. establish (create) other bodies of the company and determinate the power and the fields of activity;
  10. decide on the acquisition by the company of shareholder’s share;
  11. approve the results of the company’s activities for the year (or other period);
  12. distribute the company’s net profit and decide on the dividend payout;
  13. make decisions on separation, merger, division, accession, liquidation, and transformation of the company; elect the members of company liquidation commission or liquidator; approve the order of this process and the order of distribution of the assets between the shareholders; approval of company’s liquidation balance sheet;
  14. take other decisions.

Decisions on the issues mentioned in paragraphs 4, 5, 9, 10 above shall be approved unanimously (100%) by all the shareholders of the company. Decisions on the issues mentioned in paragraphs 2, 3, 13 above shall be approved by 3/4 (75%) of the shareholders. Decisions on all other issues are to be approved by the majority (50%+1 vote).

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