President signed the Corporate Contracts Act
On February 15, 2018, the President of Ukraine signed the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Concerning Corporate Agreements" (Project No. 4470 of April 19, 2016), which introduces in the domestic legislation provisions on the conclusion of corporate contracts - agreements on the exercise of the rights of participants (founders) of a limited liability company and agreements between shareholders.
The right to conclude corporate contracts is granted not only to shareholders, but also to participants (founders) of limited liability companies, which is a novelty of the Ukrainian legislation.
The parties to the corporate contract are obliged to exercise the rights provided to the participants (founders) and shareholders in the manner specified in the contract; in addition, the parties are obliged to vote in the manner established by such agreement, agree on the acquisition or alienation of a stake (shares) at a predetermined price and/or refrain from alienating of shares until the circumstances specified in the contract arise, and also perform other actions related to the management of a legal entity or its termination.
A separate novelty of the Law was the introduction into the Ukrainian legislation of an irrevocable power of attorney for corporate rights. Such power of attorney is issued for the purpose of fulfilling or ensuring the fulfilment of obligations of company members. The subject of power of attorney is the rights to the shares or powers of the participants. Irrevocable power of attorney shall be notarized.
Such contracts for participants (founders), shareholders of companies may entail the obligation:
- to exercise their corporate rights in the manner provided for in the contract;
- to refuse to exercise these rights;
- to vote in the manner provided for in the contract at the general meeting of participants in a limited liability company;
- to agree to perform other actions related to the management of such a company;
to acquire or sell shares at a certain price or upon the occurrence of circumstances specified in the contract or to refrain from the alienating of shares until the circumstances specified in the contract arise.