[ESTABLISHING A BUSINESS ENTITY IN UKRAINE] 513
The data on the UBO (in particular, full name, country of citizenship, place of residence, full name and ID number (for residents) of the founder of the legal entity of which the person is the UBO and the extent of beneficial ownership or information on the absence of the UBO of a legal entity, including the UBO of its founder) is publicly available at the website of the State Register. 3.3. Accounting and reporting requirements In general, LLCs are subject to standard reporting rules, such as periodic submission of financial statements to the tax authorities. Also, under Ukrainian legislation, financial statements of companies are not considered as commercial secret, confidential information or information with limited access. Therefore, the companies must provide copies of financial statements (including consolidated ones) at the request of legal entities and individuals. In general, there is no requirement for the LLC to publicly disclose information or reporting. However, in cases established by laws, certain companies (e.g., big or middle companies as determined according to financial and other criteria envisaged by the legislation) are required to publish on their website (webpage) their reporting, e.g., annual financial statements, audit reports, management reports, reports on payments in favour of the state, consolidated reporting. The audit of financial statements is also not generally obligatory in the LLC, except for cases established by laws (e.g., for the companies obliged under the law to publish their financial reporting along with audit report). The audit shall also be performed upon request of the participant(s) of the LLC. An LLC is obliged to store documents related to the activities of an LLC, such as corporate documents (e.g., decisions of participants, AoA), annual financial reporting, auditors’ reports,
documents confirming the rights of the LLC to the property, accounting documents, etc. The LLC shall ensure access of the participants to the stored documents. 3.4. Requirements for local shareholding/directors An LLC shall be incorporated by at least 1 founder (participant). There are no limitations as to the quantity of founders (participants). The LLC may be incorporated by individuals and/or legal entities (both Ukrainian or foreign). Prior to the incorporation of an LLC, foreign individuals who are founders need to obtain Ukrainian tax identification codes. An executive body of the LLC may be composed of both Ukrainian and/or foreign individuals. Prior to appointment, foreign individuals who are directors need to obtain Ukrainian tax identification codes. A member of the executive body may perform its functions either based on a services agreement or employment agreement. In the case of employment of a foreign individual, prior to it, the LLC needs to obtain a work permit for such individual. There is no obligation for foreign participants/members of the executive body to reside in Ukraine. However, if there is a need for frequent visits to Ukraine or a long stay in Ukraine, a foreigner may obtain a temporary residence permit in Ukraine under certain conditions (e.g., availability of a work permit). In certain cases, and under the conditions provided for by the law, the powers of an executive body may be performed by a legal entity registered according to Ukrainian legislation (e.g., this option is available for LLCs – residents of Diia City, which are mostly IT companies). 3.5. The conclusion of a corporate agreement A corporate agreement under Ukrainian law is defined as an agreement under which the
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator