Registering Legal Entities – Challenges of Military Situation

The issue of registering a legal entity holds significant practical importance. As stipulated by the Civil Code of Ukraine, a legal entity acquires its civil rights and obligations from the moment of state registration, which in turn makes it a full participant in economic relations.

In this article, we will address the following questions: the authorities responsible for registration, the available registration procedures today, submission of documents for registering a legal entity, requirements for these documents, the specific documents to be submitted, and the timeline for processing applications for state registration.

Which authorities handle registration?

The answer to this question is found in Section II of the Law of Ukraine dated 15.05.2003 No. 755-IV. However, it should be noted that during a military situation and the month following its conclusion, the Resolutions of the Cabinet of Ministers of Ukraine dated 06.03.2022 No. 209 and 24.06.2022 No. 719 are in effect, which limit the number of registrars. Taking this into account, currently, you can register a legal entity through a specific list of state registrars designated by the Ministry of Justice. The active list was approved by the Order of the Ministry of Justice of Ukraine dated 29.03.2022 No. 1272/5 in the respective version. You can familiarize yourself with it at the following link: https://minjust.gov.ua/en/pages/list_of_state_registrars_and_officials_ministry_of_justice .

Taking into account this list, the key authorities for registration can be highlighted:

• State registrars of interregional departments of the Ministry of Justice, namely: Southwest (Ivano-Frankivsk), Western (Lviv), Southern (Odesa), Central-Western (Khmelnytskyi), Northeastern (Sumy), Southeastern (Dnipro), Central (Kyiv), Eastern (Kharkiv), and others.
• Certain registration actions can be carried out at the State Registration Service at city councils.

Which registration actions are available today?

From the provided list above, it can be observed that even for specific actions designated by state registrars, there are limitations on registration actions due to the legislature's intent to safeguard businesses from wartime disruptions. Another important aspect is the Law of Ukraine dated 12.05.2022 No. 2255-IX, which introduced amendments allowing for automated registration procedures.

Currently, the following registration actions can be conducted for legal entities:

• State registration of the creation of a legal entity based on a model charter (it is worth noting that only Limited Liability Companies (LLCs) can be created based on a model charter).
• Establishment, termination of individual entrepreneurs (sole traders), and changes to individual entrepreneur information.
• Change of legal entity director due to their death.
• Changes to the legal entity's registered address, types of activities, contact information for communication with the legal entity.
• State registration of changes in legal entity information that requires decisions from the legal entity's members (except decisions related to the amount of authorized (share) capital, share sizes in authorized (share) capital, composition of members, or the director of the legal entity).
• State registration of the creation of charitable organizations, public associations; state registration of changes in information about charitable organizations, including their constituent documents.
• Nearly all registration actions related to trade unions (establishment, changes, dissolution, etc.).
• State registration of government bodies, local self-government bodies, state-owned enterprises, state enterprises, communal enterprises, communal organizations (institutions, establishments), state organizations (institutions, establishments).
• And some others.

Submission of Documents for Legal Entity Registration

This matter is outlined in Article 14 of the Law of Ukraine dated 15.05.2003 No. 755-IV. The submission of documents can be done in both paper and electronic forms. Let's consider the first option:

1. Documents in paper form can be sent by mail or submitted in person by the applicant.
2. Passport of a Ukrainian citizen or another identity document confirming identity.
3. National, diplomatic, or service passport of a foreigner or another identity document verifying the identity of a foreigner or stateless person.
4. In the case of documents being submitted by a representative of the applicant, the representative must provide a document certifying their authority (unless information about the authority of the representative is included in the Unified State Register). Here, there are some exceptions in connection with the military situation; it needs to be verified whether the signature on the document is notarized by a notary included in the list of notaries approved by the Ministry of Justice authorized to perform notarial actions under the conditions of the military situation or whether such a signature was made before February 23, 2021.

In the case of electronic registration:

1. For public organizations: Online Justice House.
2. For Limited Liability Companies (LLCs) and Individual Entrepreneurs: "Diia" Portal.

Requirements for Submitted Documents:

The requirements for the content of documents are stipulated in Article 15 of the Law of Ukraine dated 15.05.2003 No. 755-IV:

• The state language.
• Legible text.
• Documents must not contain corrections, errors, and other deficiencies that prevent a clear interpretation of the text.
• Documents in electronic form must be formatted according to the requirements defined by legislation.
• The application must bear the signature of the applicant. If you are submitting by mail, the signature should be notarized (with the caveat mentioned above).
• Decisions of the authorized body of the legal entity must be prepared in accordance with the law.
• The founding document (charter, founding agreement, etc.) must be submitted in accordance with legal requirements.
• And similar points.

The documents to be submitted include:

1. Application for state registration of creation.
2. Copy of the original (notarized copy) of the founders' decision on the establishment of the legal entity.
3. Document confirming the establishment of a public formation, compliance with the legal entity's charter, based on which the public formation operates.
4. Information about the governing bodies of the public formation (name, date of birth of the head, members of other governing bodies, tax identification number (if applicable), position, contact phone number, and other means of communication), information about the person(s) authorized to represent the public formation for registration actions (name, date of birth, contact phone number, and other means of communication).
5. Founding document of the legal entity: charter, founding deed, founding agreement, etc.
6. Register of individuals who participated in the founding congress (conference, assembly).
7. Document confirming payment of the administrative fee - in cases provided for by Article 36 of this Law.
8. Copy of the identity document and proof of citizenship (nationality) of the person who is the ultimate beneficial owner of the legal entity, certified according to the law.
9. And other requirements specified in Article 17 of the Law of Ukraine dated 15.05.2003 No. 755-IV.

Document Processing Timeline

The review of documents for legal entity registration is carried out within 24 hours. During the review, the application for registration can be accepted or rejected, and any rejection must be justified and reference a specific norm. The grounds for rejection are exhaustive and provided for in Article 28 of the Law of Ukraine dated 15.05.2003 No. 755-IV. Additionally, there are other timelines depending on the type of legal entity; for instance, the review period for a political party's documents is 10 business days.

Therefore, legal entity registration is a complex process. While there are exceptions, such as Limited Liability Companies (LLCs) and Individual Entrepreneurs (sole traders), which can be registered quickly and remotely, in comparison to others, it's important not to forget the challenges of the wartime situation (limited registrars, registration actions, etc.) and other legislative requirements.