We conclude an agreement with LLC: how to find out whether your counterparty is entitled to conclude it?

The Law on LLC generates questions not only for the LLC itself, but also for their counterparties.

The Law of Ukraine "On Companies with Limited and Additional Liability" of 06.02.2018, No. 2275-VIII.

You must remember that for the conclusion of a transaction, the subject of which exceeds 50% of the value of net assets as of the end of the previous quarter, mandatory consent of the general meeting ** (Part 2, Article 44 of the LLC Law) is required. And this is important not only, in fact, for the LLC, but also for its counterparty - that is, in this case for you (including if your company is also an LLC). And although the Law on LLC does not oblige you to check your counterparties, LLC, you still have to do it. After all, if your counterparty violates these requirements, then your contract with him can be declared invalid in court (unfortunately, tax lawyers can file such a claim).

In this case, if in such a contract your company acted as a buyer and has already managed to reflect on it expenses and a tax credit, then the controllers with a high probability will take both the costs and the tax credit. As a result, your company will incur losses - even though it has not directly committed any violations.

In theory, the GFS should not in such cases withdraw costs (because the expenses are reflected in the accounting rules, and the company actually incurred them), but based on the practice of tax audits, the controllers will do it.
Thus, if you conclude an agreement with LLC, you must ensure that your counterparty complies with these requirements for the value of net assets.
The subject of the agreement does not exceed 50% of net assets - which document does the counterparty LLC confirm?

You can obtain this information from its financial statements. Wherein:
- the accounting information for this purpose does not give guarantees. After all, if it turns out that it contains false information, it will not save you from the negative consequences mentioned above, alas. Therefore, it is safer (primarily for oneself) to ask the counterparty for a copy of the financial statements. If the counterparty is ready to give you only a certificate, and it contains truthful information, you do not threaten any negative consequences if you sign a contract with it, that is, in this case much depends on trust.

Will you say that there are no legal grounds for such requests?
And here it is. After a relatively recent time, the Law of Ukraine "On Accounting and Financial Reporting" prescribes that the financial statements of companies are not a trade secret, is not confidential information and does not refer to information with limited access. Moreover, the Law explicitly states that enterprises are required to provide copies of financial statements at the request of legal entities and individuals in the manner prescribed by the Law of Ukraine "On Access to Public Information". To this end, the financial statements are suitable only as of the end of the previous quarter - in calculation from the date of the conclusion the contract, and not on the date of the transaction. The operation itself can be carried out later - and it is not necessary to repeatedly receive data on net assets (even though the amount of the counterparty's net assets could have decreased at the date of the transaction).

Framework agreement for the supply / performance of works / services and additional agreements to it: just consent to a framework agreement is sufficient?
In practice, the parties often enter into framework agreements, in which only general conditions, terms, responsibilities, etc. are recorded. At the same time, the specific composition and cost of goods / work / services are specified in additional agreements to such contracts. In this case, the consent of the general meeting is not compulsory for the conclusion of such a framework agreement (unless the transaction amount is fixed in it).

But under additional agreements, in which concrete figures will appear, such consent will already be received - and for each (of course, if the above-mentioned criterion of net assets requires this).
Conversely, if the consent of the general meeting is received under the framework agreement, but this agreement does not cover additional agreements to it, such consent will need to be received for each such agreement.

Do you need the consent of the general meeting if the contract was concluded before the Law on the LLC came into force?
To perform transactions under such a contract, the consent of the general meeting is not necessary - the LLC Law does not contain such requirements. But if you enter into additional agreements with him, then such consent will be required for them.
In conclusion, we also remind you of the need to continue to check the powers of directors of their counterparties with the help of the USR, and also it concerns mainly new counterparties - to request from them extracts from the charters (this is due to the fact that they may have additional restrictions for the conclusion of transactions - part 3 of article 44 of the Law on LLC).