Reorganization of a legal entity in Ukraine

Enterprise Reorganization

Our services include:

• consultation on reorganization issues;
• holding a meeting of the supreme body;
• drafting reorganization agreements;
• preparing documents for submission to all instances of government authorities;
• filing documents and obtaining the corresponding entry in the EGR regarding the termination of the legal entity;
• re-registration of the enterprise with state authorities;
• manufacture of a new seal.

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Anna Gaidukova Senior Lawyer

Reorganization of a legal entity is an excellent solution for those who want to continue operating but in a different format.

Legally, reorganization is one of the forms of termination of an enterprise. However, attention should be paid to the differences between reorganization and liquidation. In liquidation the enterprise generally ceases to exist, while reorganization provides for successors to whom the legal entity transfers all its rights, obligations and property.

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Enterprise reorganization may take place through:

• merger (unification) – two or more legal entities cease to exist by creating a single new one;
• acquisition (joining) – one or more enterprises join an existing legal entity, after which those enterprises cease to exist;
• division – reorganization of one enterprise into several new ones, which become successors in a certain part concerning the authorized capital;
• transformation – change by a legal entity of its organizational and legal form;
• spin-off – the transfer by means of a division balance of part of the property, rights and obligations of a legal entity to one or several new ones – the legislation does not classify spin-off as a type of reorganization.

During a merger, acquisition or division the legal entity ceases to exist, while transformation is defined by legislation as a way of creating a legal entity. Note that during transformation and spin-off the entity continues to exist.

These documents are approved by the company’s members or the governing body after all creditor claims have been fulfilled.

Reorganization requires state registration by entering a record of the termination of the legal entity into the EGR database. Only after this is the legal entity considered to have ceased its activities.

The basis for the reorganization of an enterprise is a decision by:

• the members or the supreme body;
• the court;
• the relevant state authority.

Reorganization is most often used by limited liability companies and joint-stock companies to achieve certain goals – improving the conditions of their activities, reducing the costs of maintaining the legal entity, resolving misunderstandings with business partners. For this, an LLC may be reorganized into a JSC and vice versa.

Of course, each enterprise has its own features of reorganization. For example, if it is a joint-stock company, the procedure includes obtaining the consent of the Antimonopoly Committee of Ukraine, as well as performing a number of actions related to securities; if it concerns non-profit legal entities, for example the reorganization of an organization, then this is handled by the Ministry of Justice.

It should be noted that during reorganization one must adhere to the procedure established by law:

• holding a meeting of the supreme body and adopting a decision on reorganization;
• notifying the relevant state authorities;
• placing a notice about the termination of activities in the mass media;
• re-registration with state authorities.

Our specialists thoroughly know the entire process of enterprise reorganization, so they can help you choose one of the above-mentioned forms. And if you have already decided, the lawyers will carry out the procedure professionally and as thoroughly as possible.

The procedure for terminating a legal entity is more complex than its establishment, because the enterprise has obligations to closely cooperate with state authorities, which is not always possible. We are confident in the quality of every prepared document, so a positive result will not keep you waiting long.

Experience shows that attempting to carry out an enterprise reorganization on your own leads to difficulties that delay the process indefinitely. This means additional stress and time spent.

Therefore we offer turnkey reorganization with your minimal participation.

To order the service you need to:

• send us by e-mail documents proving the existence of the legal entity: certificate (extract), constituent document and some others;
• personal attendance at a notary to grant us authority – execution of a power of attorney.

The cost of our services is determined depending on the type of enterprise and the desired timing of reorganization.

Legislation:

Law of Ukraine “On State Registration of Legal Entities and Individual Entrepreneurs” dated 15.05.2003 No.755-IV.