How will Ukrainian business live without seals?



On July 19, business owners will not be demanded sealed documents any longer. So, what the near future holds for Ukrainian entrepreneurs?

First, a seal of enterprises or individual entrepreneurs loses its legal status. The presence or absence of a seal on the document will not create any legal consequences.

The loss of the validity does not mean the interdiction of seals use. Entrepreneurs still will be able to use the seals, but they will have only the decorative function in legal terms.

However, it should be remembered that legislative changes did not concern the status of seals of those persons who are not considered as business entities (for example, state and local authorities, notaries, arbitration managers, etc.). That is why these persons continue to use seals without any changes.

Secondly, any state authority or local government body can not require the presence of the enterprise (or entrepreneur) seal on documents submitted to this body. It concerns even those cases when the presence of seal’s press is caused by a regulation (for example, the Cabinet of Ministers of Ukraine’s resolution).

Thirdly, in case if some state authority or local government official will demand from enterprises or entrepreneurs to set a seal, this official will bear administrative responsibility – a fine from 50 to 100 untaxed citizens’ minimums. The State Regulatory Service of Ukraine will be able to impose this fine.

Forth, the procedure to authorize copies of documents submitted by enterprises and entrepreneurs to state authorities and local government bodies will be clearly regulated. From the moment of enacting the law, it will be enough to apply an enterprise executive director’s signature or an entrepreneur’s signature on such copies to authorize them. Notarized copies will be demanded only in case if it is stated de jure, which is extremely rare.

The abolishment of seals refocuses the attention at a person’s signature applied on the document. However, unfortunately, the signature as an identifier of the identity of the signatory is no better than the seal.

Factually, there is no statutory regulation of the signature in Ukraine, and the signature itself is based solely on traditions. Is it necessary for a person to have a signature? Which criteria must it correspond: can the letters, signs, pictures be there? Which size and orientation? How often a signature can be changed? What is the maximum of signatures a person may have? Is there another way of applying a signature except by a pen?

The uncertainty of answers to these questions leads to the conclusion that the main role of signatures is not only to identify a person who signed a document (although often it is quite possible), but to confirm that a person signed a document agreed with the content of this document and giving it the legal value.

How to protect from the deception, fraud and raiding without seals?

First, in case of negotiating of important contracts you should demand signing the contract by your counterparty in your presence (better take in presence of several witnesses).

Secondly, the signatures on the most important contracts should be notarized. A draft decree, which is initiated by the government and abolishes the minimal cost of notaries’ services (1% of a contract price), is currently submitted to the President of Ukraine, so, we hope that this protection method will be less expensive for the business.

Thirdly, it is necessary to take a close look at the data of the United State Register of legal entities, individual entrepreneurs and public organizations. This register is freely available in the Internet, and it is easy to find there the information about those who have a right to sign documents from the behalf of the enterprise (perform transactions) and restrictions set to such person.

It is useful to examine the Register data not only on your counterparty but also on your enterprise – the details of restrictions prescribed (if they are there) to perform transactions on behalf of the enterprise by executive bodies of the enterprise.

Forth, in case when it is impossible to sign the documents in the presence of the counterparty, you should widely use and even sometimes duplicate the paper documents with the electronic ones signed by the electronic signature.

What exactly should not be expected?

One that on July 20, 2017 all the entrepreneurs seals will be in a trash can, and the documents will be registered solely by signatures. Old habits die hard.

But the sooner it happens, and the sooner business adapts to new realities and business processes, the less problems this business and government bodies and institutions will have.