Do we need to amend LLC charter again?
Yes, we know that you brought your charters in accordance with the Law of Ukraine “On Limited and Additional Liability Companies” (Law on LLCs) and intended to no longer disturb the members, but on November 2nd, 2019, this and other laws were amended, and you should know about the amendments:
1. From the Law of Ukraine “On State Registration of Legal Entities, Individuals-Entrepreneurs and Public Associations”, the requirement to submit to the registrar the consent of other members to join the heir to the company was removed. These changes removed inconsistencies.
2. The following documents shall be executed on notarial forms:
- decision of legal entities on determining the size of the authorized capital and shares of members.
- acts of transfer and acceptance of a share (part of a share) in the authorized capital.
- decision to expel a member from LLC.
- application for joining the LLC and exit from the LLC.
- acts on the transfer of real estate to and from the authorized capital of legal entities.
- acts of transfer.
- distrubution balances.
- other documents prescribed by law.
3. To carry out registration actions, even legal entities must issue a notarized power of attorney to a representative (previously a power of attorney could be issued on a letterhead of a legal entity). By the way, from now on, the state registrar must determine the scope of civil legal capacity and verify the authority of the representative.
4. A member, the head of a legal entity has the right to receive information on the fact of filing or receiving documents related to such a legal entity on a gratuitous basis in real time by means of telecommunication.
5. And the most important change - the law on LLCs removed the requirement that the general meeting must approve a decision to conclude a transaction that exceeds 50% of the net assets of the LLC. This is important because the Law previously determined the binding nature of such a decision. Now the LLC has the right to decide on its own about such a restriction, and this can be solved precisely in the charter.
So, the answer to the question, “Do I need to amend the charter?” - Yes, if your charter stipulates that transactions that exceed 50% of the Company's net assets for the previous quarter require the consent of the general meeting, and you do not want to further calculate these 50%.
Why are changes to the charter needed? Because the new version of the Law refers to the restrictions provided for in the charter, and if your charter contains the above restrictions, then the Company has to adhere to it. If you want to remove these restrictions, you need to make changes to the charter.
- if amendments are made to the charter, it must be approved in a new version (amendments cannot be made as attachment to the charter).
- changes to the charter are signed by the members who voted for the introduction of such changes, or by a person authorized by the general meeting, if it is provided for by your charter.
- minimum number of votes is 3/4 unless a different number of votes is provided for in your charter.