Head of practice
Head of Corporate Law and Fintech Practice. Expert in the creation and reorganization of companies, support of M&A transactions, as well as legal support for opening and running a business in the EU, Asia, and North America.
Asset Management Agreement
The concept of “assets”
According to the Law of Ukraine “On the National Agency of Ukraine for the Identification, Search and Management of Assets Obtained from Corruption and Other Crimes”, assets are funds, property, property and other rights that may be subject to seizure in state revenue or that have been confiscated in accordance with a court decision due to their unfoundedness.
Who ensures the safety of assets?
The function of detection, tracing, and asset management is performed by the National Agency of Ukraine for Detection, Tracing, and Management of Assets Obtained from Corruption and Other Crimes (ARMA). This structure is also designed to ensure the preservation of assets; if possible, to increase their financial value.
Asset management is carried out in accordance with an agreement drawn up taking into account the requirements of Art. 70 of the Civil Code and the Special Law on ARMA. At the same time, the main goal of the process is to preserve/increase the value of assets and the efficiency of their management.
Terms of the asset management agreement
The function of asset management is entrusted to the manager, who will take care of them in accordance with the law. The manager may exercise his powers solely on the basis of an agreement with ARMA. This agreement provides for:
- Mandatory – monthly payment, regardless of whether the manager received income from the property or not.
- In the absence of transfer of funds to the budget, the manager will bear the liability provided for by law.
- For improper or non-fulfillment of the terms of the contract, the manager is obliged to pay a penalty. This condition will apply in the event of non-transfer of funds to the State Budget of Ukraine.
- In the event that the manager terminates the contract unilaterally, ARMA may exercise its right to demand payment of a penalty, namely – in the amount of ten times the amount specified in the asset management contract as payment for the manager’s own funds.
- In the event that the contractual terms have been terminated, the manager is obliged to fulfill contractual obligations, namely – to compensate for losses and other property costs incurred by ARMA due to the manager’s failure to fulfill the terms of the contract.
Structure of the asset management agreement
- subject of the contract
- parties
- rights and obligations of the parties
- terms of the contract
- force majeure
- liability of the parties for violation of the terms of the contract and terms of dispute resolution
- term of the contract
- details of the parties
Collection of penalties from the manager
Penalties under the asset management agreement can be levied:
- in a voluntary manner
- in a judicial manner
Peculiarities of contract execution under martial law
Martial law in Ukraine has also left its mark on the ability to fulfill the terms of contracts. This is what the manager must understand and be aware of when signing the asset management agreement.
Despite the situation, ARMA has the right to use its right to impose sanctions on the manager in the absence of revenues to the state budget of Ukraine.
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Liability for breach of contract
In case of violation of their obligations under the contract, the parties shall bear the liability specified by the legislation of Ukraine.
If the manager acted in bad faith in fulfilling his duties, which resulted in a violation of the terms of the contract, he must compensate the losses in full. The manager may be exempted from this if he can prove that he failed to fulfill his obligations due to force majeure.
Professional assistance in drafting and analyzing the contract
Using template contracts from the Internet for asset management can lead to catastrophic financial consequences, because each asset management case is unique and requires taking into account specific risks, especially in martial law. In addition, penalties for violating the terms of the contract can reach ten times the amount of management, so saving on professional legal assistance in drawing up the contract can result in significant financial losses and litigation with ARMA.
When you find a sample asset management contract on the Internet, remember that it does not take into account the latest changes in legislation and does not contain important protective mechanisms that can only be provided by an experienced lawyer familiar with the current law enforcement practice in the field of asset management.
The team of lawyers “Prykhodko and Partners” will help you:
- Develop an individual asset management agreement
- Analyze the existing agreement for risks
- Ensure reliable protection of your interests
- Optimize the terms of the agreement according to your needs
Get professional advice right now! Fill out the form below and wait for a call from our lawyer.
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1 question
Do you already have a signed asset management agreement?
2 question
Does the value of the assets being transferred to management exceed 500 thousand hryvnias?
3 question
Do you plan to manage assets during martial law?
Is a subscriber form of service possible to quickly resolve issues as they arise?
Yes, of course, we take companies for permanent support.
The subscription form of service allows you to receive a full range of legal services on an ongoing basis for a fixed monthly fee.
Our lawyers will accompany all economic legal relations of your company: from drawing up contracts and solving corporate issues to representing interests during inspections by regulatory bodies and in court disputes.
We have very flexible pricing, so contact us and we will discuss your specific case.
Do you work only in Kyiv?
Fortunately, modern technologies allow us to effectively solve almost any legal issue online regardless of your location. In cases where personal presence is necessary, our lawyers are ready to travel to any point in Ukraine. Moreover, thanks to our network of reliable partners abroad, we can provide legal support even in international cases. Our goal is to provide you with quality legal assistance wherever you are.
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