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Perepelchenko Anatolii

Deputy Managing Partner

Lawyer, specializing in real estate, corporate, tax, civil and contract law, as well as litigation.

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Anatoliy Perepelchenko on the sale of corporate rights of the Farm

Sale of corporate rights on a farm. The activity of farms in Ukraine is regulated by the Law of Ukraine on Farming, which was adopted in 2003. In practice, there are many questions about the imperfection of the rules in this law. The Law of Ukraine contains 38 articles regulating the functioning of farms. However, analyzing these regulations, we can conclude that this law is not perfect, and raises many issues that it regulates. In particular, as an integral property complex. In general, the sale of a farm can be carried out in 2 ways:
1) – Alienation of corporate rights in the farm
2) – Sale of the enterprise as a single integral property complex.
Both paths have radically different property nature, first of all the difference is the object of legal relations. In the first case, the share in the authorized capital of the business entity is sold. In the second set of all types of property intended for the enterprise. In turn, the object of legal relations causes a difference in the definition of the person, the seller, in the application of these structures, because the alienation of property by common law can only be its owner. Therefore, the seller of the share to the authorized capital will be the participant, the subject of the share, and the seller of the CMC will be the business entity. However, in the activities of farms, in the case of the sale of corporate rights, there are also some nuances, most farms in Ukraine exist without tattoo capital, because the formation of such legislation is not provided by Ukraine. So the practical implementation of this option, obtaining control over the property of the farm is impossible due to the lack of alienation, namely the share in its authorized capital. Therefore, in the case of acquisition or sale of farms, in the direction without authorized capital – there are three ways:
– alienation of shares of the property complex
– Preliminary performance of certain actions for the possibility of selling corporate rights
There are also a number of nuances in the easier and faster way of selling a farm in the form of selling corporate rights, because most farms are closed without authorized capital, as the legislation of Ukraine does not provide for its mandatory formation. Therefore, the practical implementation of this option is not possible in terms of the absence of the object of alienation, namely the share in its authorized capital, so in the case of acquisition or creation of farm capital, there are three main ways:
– alienation of him as a CMC
– committing a number of specific actions to enable the sale of corporate rights
– sale of each component of the CMC separately.
With regard to certain actions, the possibility of selling corporate rights in the farm can be considered by making changes to the constituent documents of the farm, namely the issue of formation of authorized capital and distribution of its shares among its participants.
After the formation of the authorized capital, the owners of the farm get a practical opportunity to sell the farm by alienating corporate rights.

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