ANTI-RIDER LAW: CHANGES IN THE ORDER OF STATE BUSINESS REGISTRATION

 On November 2, 2019, the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on the Protection of Property Rights" came into force, dated 03.10.2019 (hereinafter referred to as the Law), which provides for substantial changes to the procedure for state registration of business and real estate.

 What exactly has changed in the process of state registration of business:

 1. The principle of extraterritoriality for state registration of individual entrepreneurs is introduced. From now on, you can register an individual entrepreneur (FOPa) with any state registrar within the territory of Ukraine, regardless of the place of residence of the individual. For legal entities and public entities that do not have the status of a legal entity, such an opportunity is provided only in the case of registration on the basis of documents submitted in electronic form. In the case of state registration of a legal entity or public formation on the basis of documents submitted in paper form, registration actions are possible only at their location, but within the respective region, the city of Kiev or the Autonomous Republic of Crimea.

 2. The simultaneous notarization of the legal deed on the alienation of corporate rights and the state registration of changes to the information on the legal entity contained in the Unified State Register are provided. The law stipulates that state registration of changes to information about a legal entity contained in the Unified State Register takes place immediately after a notarization of a transaction of alienation of a share in the authorized (compound) capital of a legal entity or immediately after the issue of a certificate of inheritance right to a share in the statutory (compiled) capital of a legal entity, and is held only by the notary who has made the relevant notarial act. Conducting after the notarial act of one notary of the state registration changes to the information about the legal entity by another notary is allowed only if there are good reasons and subject to prior written notification of the territorial body of the Ministry of Justice of Ukraine. Also, the involvement of another notary to perform registration actions is allowed in case of death of the notary who made the notarial act, declaring him dead or unknown if the notary public health cannot make registration actions, termination or termination of the activity of notarisation, registration action.

 At the same time, the transfer to another notary of the application for the state registration of changes to the information about the legal entity is carried out by means of the software of keeping the Single State Register by the relevant territorial body of the Ministry of Justice of Ukraine.
At the same time, the provisions on simultaneous notarization and state registration of changes do not apply to:
1) joint stock companies (JSC);
2) limited liability companies (LLC);
3) subsidiaries with additional liability (VAT).

 Also, the relevant provisions do not apply in the case of a notarial deed, the legal consequence of which is associated with the occurrence of a particular circumstance (for example, a deed of attorney with a suspensive condition). That is, in case of notarization of the agreement on the alienation of the share in the authorized capital of LLC, TDV or JSC, you can contact another notary or state registrar for state registration of changes to the relevant information in the Unified State Register.

 In the case of other legal entities (private enterprises, cooperatives, state or communal enterprises, etc.), the state registration of changes can be carried out only by the notary who has certified the contract on the alienation of corporate rights or issued a certificate of inheritance rights. In fact, for such legal entities, a monopoly of notaries for the implementation of state registration of changes is introduced, since only notaries can simultaneously certify transactions and carry out registration actions. State registrars of local self-government bodies or local state administrations will not be able to register state changes to information about a legal entity (except LLC, VAT or JSC), since they do not have the right to perform notarial acts, which in this case is a necessary prerequisite for committing registration actions.

 3. Mandatory written form of the agreement on the alienation of corporate rights is established. According to the Law, the contract of alienation of property, the subject of which is a share (part of it) in the authorized capital of the company, is concluded in writing.

 4. Notarized documents, on the basis of which state registration is carried out, shall be laid out on special forms of notarial documents.

 From November 02, 2019 on the special forms of notarial documents shall be presented with a notarization certificate:
1) the decision of the governing body of the legal entity submitted for the state registration of changes to the information on the legal entity contained in the Unified State Register (except for decisions created on the portal of electronic services using a qualified electronic signature);
2) the transfer act;
3) distributive balance.

 In addition, it is mandatory to use special forms of notarial documents for the following documents for LLC and VAT:
1) the decision of the general meeting of participants to determine the size of the authorized capital and the size of shares of participants;
2) the decision of the general meeting of participants to exclude the participant from the company;
3) applications for membership in the company;
4) statements about leaving the company;
5) act of acceptance-transfer of a share (part of a share) in the authorized capital of the company.

 The requirement of a notarization certificate with the obligatory use of special forms of notarial documents does not apply in case of state registration of changes to information about LLC or VAT based on documents created on the portal of electronic services and signed by qualified electronic signature.

 5. It is planned to introduce a mechanism for automatic notification of registration actions against a legal entity.
The law provides for the right of participants and the head of a legal entity to receive information, free of charge, in real time, about the fact of submitting or receiving documents for carrying out registration actions against such legal entity.

 6. Provision of automatic monitoring of risky registration actions. The law provides for automatic monitoring of risky registration activities.