Date of entry into
force:
April 29, 2009
(Abstract)
The present Law shall identify the procedure for setting up, operating,
terminating, and separating joint stock companies, their legal status, and
rights and obligations of shareholders.
According to Article 3 of the present Law, a joint stock company shall be a
business entity whose authorized capital was divided into a certain number of
shares of equal nominal value were corporate rights shall be attested by
shares. A joint stock company shall not be liable for obligations of its
shareholders. It shall not be possible to apply any sanctions to a joint stock
company and its bodies that shall limit their rights in the instance when
shareholders have committed illegal acts. Shareholders shall not be liable for
obligations of a joint stock company and shall bear the risk of losses related
to activities of a joint stock company only within the limits of shares
belonging thereto. Shareholders shall not be subject to any sanctions that
shall limit their rights in the instance when the relevant joint stock company
has or other shareholders have committed illegal acts.
Article 5 of the present Law shall identify that joint stock companies
shall be divided in terms of their types into public joint stock companies and
private joint stock companies. The quantitative composition of shareholders of
a private joint stock company shall not exceed 100 shareholders.
A joint stock company may be set up by one individual or entity or may
consist of one individual or entity in the instance when one shareholder shall
purchase all shares of a joint stock company. Information about that shall be
subject to registration and publication for public information according to the
procedure set forth by the State Commission for Securities and the Stock
Market.
According to Article 7 of the present Law, shareholders of a public joint
stock company may alienate shares belonging thereto without the agreement of
other shareholders and the joint stock company. The Charter of a private joint
stock company may provide for the preferential right of its shareholders and
the joint stock company itself to purchase shares of such a joint stock company
that shall be offered by their holder for sale to a third entity or individual.
Shareholders of a private joint stock company shall have the preferential
right to purchase shares that shall be sold by other shareholders of the
relevant joint stock company at a price and on terms and conditions offered by
such a shareholder to a third entity or individual in proportion to the number
of shares belonging to each of them. The preferential right of shareholders to
purchase shares that shall be sold by other shareholders of the relevant joint
stock company shall be valid within two months from the date when the relevant
joint stock company receives a notification of such a shareholder of their
intention to sell shares, unless a shorter deadline is specified in the Charter
of the relevant joint stock company.
Article 9 of the present Law shall establish that the state in the person
of the body authorized to manage state-owned property, the relevant territorial
community in the person of the body authorized to manage communal property, as
well as private individuals and/or legal entities that have made the decision
to set up a joint stock company shall be recognized as founders of such a joint
stock company. One, two or more individuals or entities may be founders of a
joint stock company.
A joint stock company shall be set up following the below-mentioned stages:
·
the meeting of
founders shall make a decision on setting up a joint stock company and on
carrying out a closed (private) placement of shares;
·
an application and
all the necessary documents shall be submitted to the State Commission for
Securities and the Stock Market for the registration of the issue of shares;
·
the State
Commission for Securities and the Stock Market shall register the issue of
shares and shall issue a temporary certificate of registration of the issue of
shares;
·
shares shall be
assigned an International Securities Identification Number (ISIN);
·
a contract for
servicing the issue of shares shall be concluded with a depositary of
securities or a contract for keeping the register of holders of registered
securities shall be concluded with a registrar of registered securities;
·
a closed (private)
placement of shares shall be carried out among the founders of the relevant
joint stock company;
·
founders shall pay
full nominal value of shares;
·
the Constituent
Assembly of the joint stock company shall approve the results of a closed
(private) placement of shares among the founders of the joint stock company,
the Charter of the joint stock company, as well as make other decisions
stipulated by the law;
·
the joint stock
company and its Charter shall be registered with bodies of state registration;
·
a report on the
results of a closed (private) placement of shares shall be furnished to the
State Commission for Securities and the Stock Market;
·
the State
Commission for Securities and the Stock Market shall register the report on the
results of a closed (private) placement of shares;
·
the joint stock
company shall receive a certificate of state registration of the issue of
shares;
·
founders of the
joint stock company shall be issued documents that shall confirm the ownership
right for shares.
According to Article 10 of the present Law, the Constituent Assembly of a
joint stock company shall resolve issues related to:
·
the foundation of
the joint stock company;
·
the approval of
the assessment of property deposited by founders towards the payment for shares
of the joint stock company;
·
the approval of
the Charter of the joint stock company;
·
the creation of
bodies of the joint stock company;
·
the authorization
of a representative (representatives) to carry out further activities to set up
the joint stock company;
·
the election of
members of the Supervisory Board, Chairman of the collective executive body of
the joint stock company (an individual who shall exercise powers of an
individual executive body of the joint stock company) and members of the Auditing
Committee (an auditor);
·
the approval of
the results of a placement of shares;
·
the committal of
other actions that shall be necessary to set up the joint stock company.
Article 13 of the present Law shall specify that the Charter of a joint
stock company shall be the constituent document of the relevant joint stock
company. The Charter of a joint stock company shall contain information about:
·
full and
abbreviated name of the joint stock company in the Ukrainian language;
·
the type of the
joint stock company;
·
the size of its
authorized capital;
·
the size of its
capital reserves;
·
the nominal value
and the total number of shares, the number of each type of shares placed by the
joint stock company, including the number of each class of privileged shares,
as well as the consequences of the failure to fulfill the obligations to buy
out shares;
·
terms and
conditions of, as well as the procedure for converting privileged shares of a
certain class into ordinary shares of the joint stock company or into
privileged shares of a different class in the instance when the joint stock
company provides for the issue of privileged shares;
·
rights of
shareholders – holders of privileged shares of each class;
·
the availability
of the preferential right of shareholders of a private joint stock company to
purchase shares of this joint stock company that shall be offered by a
shareholder for sale to a third individual or entity, and the procedure for its
realization;
·
the procedure for
notifying shareholders of the payment of dividends;
·
the procedure for
convening and holding the General Meeting;
·
the competence of
the General Meeting;
·
the way for
notifying shareholders of changes in the agenda of the General Meeting;
·
the composition of
the bodies of the joint stock company and their competence, the procedure for
establishing them, electing and recalling their members, and for making
decisions thereby, as well as the procedure for changing the composition of
bodies of the joint stock company and their competence;
·
the procedure for
introducing amendments to the Charter;
·
the procedure for
terminating the joint stock company.
The minimum size of the authorized capital of a joint stock company shall
constitute 1,250 minimum wages, proceeding from the rate of the minimum wage
that shall be in effect at the moment of setting up (registering) the joint
stock company. The authorized capital of a joint stock company shall determine
the minimum size of the joint stock company’s assets that shall guarantee
interests of its creditors (Article 14 of the present Law).
The authorized capital of a joint stock company shall be increased by way
of raising the nominal value of shares or placing additional shares of the
current nominal value according to the procedure set forth by the State
Commission for Securities and the Stock Market. The authorized capital of a
joint stock company shall be decreased according to the procedure set forth by
the State Commission for Securities and the Stock Market by way of lowering the
nominal value of shares or by way of withdrawing shares purchased earlier by
the joint stock company and reducing their total number, if this is envisaged
by the Charter of the joint stock company.
According to Article 18 of the present Law, a joint stock company shall
have the right to consolidate all shares placed thereby. As a result, two or
more shares shall be converted into one new share of the same type and class. A
joint stock company shall have the right to split up all shares placed thereby.
As a result, one share shall be converted into two or more new shares of the
same type and class. In the instance of consolidating or splitting up shares,
the relevant amendments related to the nominal value and the number of shares
placed shall be introduced to the Charter of the joint stock company.
Article 20 of the present Law shall establish that a share of a joint stock
company shall attest corporate rights of a shareholder with respect to the
relevant joint stock company. All shares of a joint stock company shall be
registered shares. Shares of joint stock companies shall be issued exclusively
in the non-documentary form. A joint stock company may place shares of two
types: ordinary shares and privileged shares. The Charter of a joint stock
company may provide for the placement of one or several classes of privileged
shares, which shall grant different rights to their holders.
A joint stock company may issue shares only on the basis of a decision of
the General Meeting. A joint stock company may place other securities, in
addition to shares, on the basis of a decision of the Supervisory Board, unless
otherwise is envisaged by the Charter of a joint stock company. The decision to
place securities for the amount that shall exceed 25 percent of the value of
the joint stock company’s assets shall be made by the General Meeting of
Shareholders.
According to Article 25 of the present Law, each ordinary share of a joint
stock company shall grant its holder – the shareholder – an equal package of
rights, including the right:
·
to participate in
managing the joint stock company;
·
to receive dividends;
·
to receive a part
of property of the joint stock company or its cost in the instance of
liquidation of the joint stock company;
·
to receive
information about business activities of the joint stock company.
One ordinary share of a joint stock company shall give a shareholder one
vote to resolve each issue at the General Meeting, except for the instance when
a cumulative voting is held. Shareholders who shall be holders of ordinary
shares of a joint stock company may also have other rights set forth by
legislative acts and the Charter of the joint stock company.
Each privileged share of one class of a joint stock company shall grant its
holder – the shareholder – an equal package of rights. The Charter of a joint
stock company shall identify the volume of rights that shall be given to a
shareholder who is holder of each class of privileged shares. Also, the Charter
of a joint stock company shall specify:
·
the size of and
the order for paying out dividends;
·
the liquidation
value and the order of payments in the instance of liquidation of a joint stock
company;
·
the instances,
terms and conditions of converting privileged shares of the relevant class into
privileged shares of a different class, ordinary shares or other securities;
·
the procedure for
receiving information (Article 26 of the present Law).
Article 28 of the present Law shall stipulate that officials of bodies of a
joint stock company and other individuals that shall have employment
relationships with a joint stock company shall not have the right to demand
from a shareholder who shall be employee of the joint stock company to provide
information about how they have voted or how they intend to vote at the General
Meeting, or about the alienation by a shareholder who shall be employee of the
joint stock company of their shares or the intention to alienate them, or to
demand the transfer of a power of attorney to participate in the General
Meeting.
According to Article 30 of the present Law, a dividend shall be a part of
net profits of a joint stock company that shall be paid to a shareholder
calculated per one share of a certain type and/or class belonging to such a
shareholder. The same size of dividends shall be calculated for shares of the
same type and class. A joint stock company shall pay out dividends with the
help of cash resources only. Dividends shall be paid for shares where the
report on the results of placing such shares was registered according to the
procedure set forth by the legislation.
The size of dividends under privileged shares of all classes shall be
determined in the Charter of a joint stock company.
Article 32 of the present Law shall stipulate that the General Meeting
shall be the highest body of a joint stock company. A joint stock company shall
have to convene the General Meeting (the Annual General Meeting) every year.
The Annual General Meeting of a joint stock company shall be held not later
than April 30 of the year following the reporting year.
The exclusive competence of the General Meeting shall include:
·
identifying the
main areas of activities of the joint stock company;
·
introducing
amendments to the Charter of the joint stock company;
·
making a decision
on withdrawing redeemed shares;
·
making a decision
on changing the type of the joint stock company;
·
making a decision
on placing shares;
·
making a decision
on increasing the authorized capital of the joint stock company;
·
making a decision
on decreasing the authorized capital of the joint stock company;
·
making a decision
on splitting up or consolidating shares;
·
approving the
regulations on the General Meeting, the Supervisory Board, the executive body,
and the Auditing Committee (an Auditor) of the joint stock company, as well as
introducing amendments thereto;
·
approving other
internal documents of the joint stock company, unless otherwise is specified by
the Charter of the joint stock company;
·
approving the
annual report of the joint stock company;
·
distributing
profits and losses of the joint stock company;
·
making a decision
on buying out shares placed by the joint stock company;
·
making a decision
on the form in which the shares shall exist;
·
approving the size
of annual dividends;
·
making decisions
on issues related to the procedure for holding the General Meeting;
·
electing members
of the Supervisory Board, approving terms and conditions of civil and legal or
labor contracts that shall be concluded with them, establishing the size of
their remuneration, electing an individual who shall be authorized to sign
civil and legal contracts with members of the Supervisory Board;
·
making a decision
on terminating powers of members of the Supervisory Board;
·
electing Chairman
and members of the Auditing Committee (an Auditor) and making a decision on
terminating their powers pre-term;
·
approving
conclusions of the Auditing Committee (an Auditor) and making a decision on
terminating their powers pre-term;
·
making a decision
on separating and terminating the joint stock company, on liquidating the joint
stock company, on electing the liquidation commission, on approving the
procedure and deadlines for liquidation, the procedure for distributing the
property that shall be left after claims of creditors have been satisfied among
shareholders, and approving the liquidation balance sheet;
·
making a decision
on the basis of the results of examining the report of the Supervisory Board,
the report of the executive body, and the report of the Auditing Committee (an
Auditor);
·
approving the
principles (the code) of corporate management of the joint stock company;
·
electing a
commission for terminating the joint stock company;
·
tackling other
issues that shall belong to the exclusive competence of the General Meeting
according to the Charter of the joint stock company or the Regulation on the
General Meeting of the joint stock company.
According to Article 37 of the present Law, the agenda of the General
Meeting of a joint stock company shall be preliminarily approved by the
Supervisory Board of a joint stock company and, in the instance of convening an
extraordinary General Meeting upon request of shareholders – by shareholders
who shall request such a meeting.
Article 39 of the present Law shall provide for the possibility of
representation of shareholders. A representative of a shareholder at the
General Meeting of a joint stock company may be a private individual or an
authorized person of a legal entity, as well as an authorized person of the
state or a territorial community. A shareholder shall have the right to appoint
their representative on a permanent basis or for a certain period of time. A
shareholder shall have the right, at any moment, to replace their
representative, notifying the executive body of the joint stock company
thereof. The power of attorney for the right to participate and to vote at the
General Meeting may be verified by a registrar, a depositary, a keeper, a
notary, and other officials who shall commit notarial acts, or according to
some other procedure set forth by the legislation.
According to Article 41
of the present Law, the availability of a quorum at the General Meeting shall
be determined by a registration commission at the moment when the registration
of shareholders for the participation in the General Meeting of a joint stock
company is finished. The General Meeting of a joint stock company shall have a
quorum on condition of registration of shareholders for the participation in
the General Meeting who shall jointly hold at least 60 percent of voting
shares.
In the instance when a
decision of the General Meeting or the procedure for making such a decision
violates the requirements of the present Law, other legislative acts, the
Charter, or the Regulation on the General Meeting of a joint stock company, a
shareholder whose rights and interests protected by the law have been violated
by such a decision may appeal such a decision in court within three months from
the date when such a decision has been made.
Article 51 of the
present Law shall envisage that the Supervisory Board of a joint stock company
shall be a body that shall protect the rights of shareholders of a joint stock
company and, within the limits of competence identified by the Charter of the
joint stock company and the present Law, shall oversee and regulate activities
of the executive body. It shall be imperative to set up a Supervisory Board in
joint stock companies where the number of shareholders who shall be holders of
ordinary shares shall be ten individuals or entities and higher. In the
instance when there is no Supervisory Board in joint stock companies where the
number of shareholders who shall be holders of ordinary shares shall be nine
individuals or entities and lower, powers of the Supervisory Board shall be
exercised by the General Meeting.
According to Article 58
of the present Law, the executive body of a joint stock company shall manage
day-to-day operation of a joint stock company. The competence of the executive
body shall include the solution of all issues related to management of day-to-day
operation of a joint stock company, except for the issues that shall be
included in the exclusive competence of the General Meeting and the Supervisory
Board. The executive body of a joint stock company shall be accountable to the
General Meeting and the Supervisory Board and shall organize the fulfillment of
their decisions. The executive body shall act on behalf of the joint stock
company within the limits established by the Charter of the joint stock company
and the law.
An individual or an
entity (individuals or entities that shall act together) that has (have)
purchased 50 and more percent of ordinary shares of a joint stock company (the
controlling stake) shall, within 20 days from the date of purchasing the
controlling stake, have to propose to all shareholders to purchase their
ordinary shares of the joint stock company, except for the instances of
purchasing the controlling stake in the process of privatization.
According to Article 73
of the present Law, the General Meeting shall elect an Auditing Committee (an
Auditor) to carry out an inspection of financial and business activities of a
joint stock company. It shall be necessary to institute the office of an
auditor (or to elect an Auditing Committee) in joint stock companies where the
number of shareholders who shall be holders of ordinary shares of a joint stock
company shall be below 100 individuals or entities. It shall be imperative to
elect an Auditing Committee in joint stock companies where the number of
shareholders who shall be holders of ordinary shares of a joint stock company
shall be above 100 individuals or entities.
Article 83 of the
present Law shall provide for the possibility of a merger of joint stock
companies. A merger of joint stock companies shall be recognized the emergence
of a new joint stock company that shall be the legal successor involving the
assignment thereto according to the deeds of assignment of all rights and
obligations of two or more joint stock companies simultaneously with their
cessation. A joint stock company may participate in a merger only with another
joint stock company.
Voluntary liquidation of
a joint stock company shall be carried out on the basis of a decision of the
General Meeting, including in connection with the expiry of the period for
which such a joint stock company was set up or upon the achievement of the
purpose for which such a joint stock company was set up. Voluntary liquidation
of a joint stock company shall be carried out according to the procedure
specified by the Civil Code of Ukraine and other legislative acts, with due
consideration for the specifics set forth by the present Law. Other reasons and
the procedure for liquidation of a joint stock company shall be determined by
the legislation (Article 88 of the present Law).
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