INCREASE OF STATUTORY CAPITAL AND REDISTRIBUTION OF PARTS OF PARTICIPANTS OF LLC

  Article 18 of the Law of Ukraine “On Limited and Additional Liability Companies” (hereinafter – the Law) provides for the possibility of increasing the authorized capital at the expense of additional contributions of participants and / or third parties. Each participant shall have the pre-emptive right to make an additional contribution within the amount of the share capital increase in proportion to its share in the share capital. However, the charter or unanimous decision of the general meeting of participants, in which all members of the company attended, may establish the possibility of participants to make additional contributions without observing the proportions of the participants’ shares in the authorized capital (Part 7 of Article 18 of the Law). For example, if the participant’s share is 40% and 60% and the additional contribution is in the proportion of 70% and 30%. In this case, with the increase of the authorized capital, the redistribution of the shares of participants is possible.

 The intention to increase the authorized capital is formalized by the decision of the general meeting of members of the company to attract additional deposits (Part 3 of Article 18 of the Law), which should state:

– the total amount of increase in the authorized capital of the company;
– the ratio of the amount of increase to the share size of each participant;
– planned share capital;
– the deadline for making additional contributions.

 The decision on the intention to increase the authorized capital is obligatory today, and, unlike the previous version of the law, today the state registration is made upon the approval of changes to the authorized capital (actual contribution), which is subject to a separate decision for registration.

 The total amount of the authorized capital increase is calculated by determining the monetary valuation of the additional contribution. If you make a non-monetary contribution, you need to make a monetary assessment of it. If the additional contribution is made from the property, then in the protocol on increase of the authorized capital it is necessary to indicate the list of property, inventory and factory numbers.

 The ratio is calculated by dividing the amount of the contribution by the amount of each participant’s share, expressed in monetary terms. The planned share capital is determined by adding the value of the additional contribution to the existing share capital.

 Participants can decide on the redistribution of shares in the authorized capital, which is specified in the decision of the general meeting of participants. The size of the new participant shares is then determined by dividing the planned share capital by the desired participant share size.

 In the decisions of the general meeting of participants, when approving the size of the participant’s shares and determining their nominal value, it should additionally indicate what part the participant pays out of the money contribution, and which expense of the property.

  Within one month from the due date for additional contributions, the general meeting of participants shall decide on:

– approval of the results of additional contributions by members of the company and / or third parties;
– approval of the size of the members of the company and their nominal value, taking into account the additional contributions actually made by them;
– approval of the increased size of the authorized capital of the company;
– approval of the new version of the charter (in case of amendments to the charter).

Author: Anatoliy Perepelchenko

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