Entrepreneurs will be able to register a LLC in 3 minutes and choose a tax system online

27-03-2019

On March 27, 2019, the Government approved a number of decisions for business developed by the BRDO Office with the support of the MEDT, the Ministry of Justice, the Ministry of Regional Development and business associations.

In particular, the procedure for registration of a limited liability company (LLC) was simplified. For example, in the period up to 2018, it was possible to register a legal entity online in Ukraine if the LLC activity was registered according to the model charter approved by the CMU Resolution No.1182 of 16/11/2011. However, with the entry into force of the new Law “On Limited Liability Companies” in June 2018, the system ceased to function, as the approved version of the LLC model charter was no longer in compliance with the law. In addition, the single model charter concept does not allow satisfying the requirements of enterprises that would like to address the specifics of their activities.

Therefore, the BRDO Office together with the Ministry of Justice, the Ministry of Economic Development and the Administrative Services Reform Office developed a new version of the LLC model charter and proposed an updated mechanism for its application that will provide:

  • multi-optional charter provisions that will allow to establish a charter with the most suitable options proposed for the needs of founders;
  • a user-friendly form to choose options with recommendations and explanations of their features;
  • automatic generation of the digital code of the charter version that was chosen allowing its automatic processing in the Unified State Register;
  • automated generation (based on the answers of applicants to the system’s questions) of minutes of the founding members meeting (general meeting of members) and applications for registration of legal entities;
  • the possibility to choose the tax system of a business entity (VAT, single tax) online;
  • the possibility to register the transition from one to another version of the model charter or from the “paper” to model charter online.

The relevant provisions are contained in the CMU draft Resolution “On Some Issues of Deregulation of Economic Activity”.

In addition, 49 thousand LLCs, which have already chosen their model charter, will finally receive their legal charters and will be able to operate in the legal field. The BRDO Office estimated that a number of LLCs that would choose the model charter would increase to 100 thousand by the end of the next summer.

“We have provided convenient mechanisms to register a LLC online in 3 minutes. This will make things much easier for businesses and improve the investment climate. Approval of the resolution will allow to launch the system of online LLC registration in April. A distinctive feature of each version of the model charter will be its automatically generated digital code. This will allow us to become one of the first countries in the world introducing the automated processing of legal texts,” the BRDO Deputy Head Denys Malyuska said.

The provisions of the draft Resolution also stipulate that LLCs that acted under the previous version of the model charter approved by the Resolution of the Cabinet of Ministers of Ukraine No.1182 of 16/11/2011 may continue to apply it until the new version is chosen, but not later than June 2019. After that, the transition to the new model charter (in the version set by the default) will be automatic.

In addition, the Government approved a unified and transparent procedure for postal address assignment to construction facilities and real estate units, simplified the registration of declarations on the facility readiness for operation and introduced online “Private cabinets” for contract owners.

As a result of the meeting of the Cabinet of Ministers, it was also decided to provide banks with access to information in state registers that would reduce the riskiness of banking activities and, finally, could reduce the cost of credit. Moreover, the procedure for environmental monitoring of ballast water during the stay of vessels in internal sea waters was improved and the import of automobile parts was simplified.

The finalized Resolution will be published within a short period of time.

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