Under the Ukrainian law are available the following forms of legal entity
- Private enterprise
- Limited liability company (LLC)
- Joint stock company
- Additional liability company
- General partnership
- Limited partnership
All company types are equal in conducting business and taxation in Ukraine.
The most popular and comfortable company type in Ukraine is Limited Liability Company (LLC).
A Limited Liability Company is a company with its statutory capital divided into participatory shares, as determined by the foundation documents. Participants are liable only to the extent of their contributions.
A Limited Liability Company is governed by
- the general meeting of participants, which is the company’s highest body;
- the Board of directors and/or General director, which are the executive body governing the company’s day-to-day operations;
- the audit committee, which controls the financial and business activity of the executive body.
LLC can be found with 100 per cent of foreign investments and can be owned either by the only one person or several persons.
This form allows solving all typical assignments of the foreign owner such as: conducting business in Ukraine through the company under control, repatriation of incomes, limitation of responsibility, etc.
A joint-stock company is a company with statutory capital divided into a certain number of shares of definite equal nominal value. Shareholders are liable for the company’s commitments only within the limits of their shares, that is, shareholders not be required to make any further contributions beyond their contributions to the statutory capital and not be liable for the company’s commitments.
There are two types of joint-stock companies:
- Public joint-stock company,
- Private joint-stock company.
In private joint-stock company the number of shareholders may not exceed 100, it can make only private placements of shares, its Charter can offer a first right of refusal to shareholders and the company itself to buy shares offered by the owner to a third party at the same price and terms proposed by a shareholder to a third party, pro-rated to the number of shares owned by each of them, the shares of a joint-stock company cannot be sold or purchased on the stock market, except for a sale through auction.
In Public joint-stock company there are no limits on the number of shareholders, it can make both private and public placements of shares, the shareholders of a Public joint-stock company can alienate shares that belong to them without the consent of other shareholders and company management, a Public joint-stock company is obliged to go through a procedure to list and join a stock registry on at least one stock market.
Other forms available under Ukrainian law such as additional liability company, General partnership, limited partnership, but they are rarely used.
Additional liability company is a company with its statutory capital divided into participatory shares, as determined by the foundation documents. Participants primarily become responsible for the company’s commitments to the extent of their contributions to statutory capital. However, if these sums are insufficient, participants shall bear additional liability pro rata to each one’s contribution. The limits of this participant liability are provided in the statutory documents.
General partnership is a company where all participants are jointly engaged in company’s business activity and are jointly responsible for the company’s obligations with all of their assets. A General partnership is managed according to the foundation agreement among the partners. The activity of the general partnership may be carried out by all, one or some of the partners, who acts on behalf of the partnership on the basis of powers of attorney issued by the other partners.
Limited partnership is a company in which one or more participants carrying out business activity on behalf of the partnership are held jointly responsible with all their property for the partnership’s commitments (general partners), while the responsibility of the remaining participant(s) who do not participate in the activity of the company is limited to their contributions to the company’s statutory capital (limited partners).
In a limited partnership, only the general partners carry out the management of the partnership. Limited partners may not interfere with the activity of the general partners in the management of the company. A limited partnership must terminate its activity when all general partners withdraw from the company.