Comprehensive changes in the LLC: what to do if you need to change everything all at once?

Corporate law is one of the core practices of our company. Many large companies have their own corporate lawyers, but even they often turn to us for help. Despite the fact that corporate law may seem simple at first glance, not all the rules are prescribed directly. You can understand many problematic issues only after many years of gaining experience in this field.

Today we will elaborate on the problematic issues concerning the amendments to the LLC’s constitutional documents and advise you on how to proceed in this or that case.

1. Not all registration procedures can be performed simultaneously.

Any decisions can be made in a “package” at the general meeting of the shareholders, but not all of them can be implemented simultaneously. The fact is that pursuant to the law of Ukraine, some changes require different packages of documents. Sometimes one may find oneself in a classic catch twenty two situation.

For example, it was decided to change the company's name and to replace the model charter to the ordinary one. The registrar will inform you that in order to register the transition to a paper charter, you must submit a corresponding registration application, the charter and the minutes of the general meeting. Although the same minutes provided for the company’s name change, the registrar cannot register these changes all at once.

The registrar will then see that the charter contains a different company’s name. Therefore, it cannot be registered. Let’s try to change the company’s name first. Seems to be the way out. But! The decision to approve the paper version of the charter was made by the company with the old name. And although the charter will contain the phrase that the company was registered under that name on the specific date, the registrar may “not see this” and therefore be overcautious and reject the registration.

Thus, in case of the transition to the model statute or vice versa - from the model to the paper form, you should not document all decisions with the same minutes.

With the introduction of the new law regulating the LLC activity, it became impossible to make changes to the company’s shareholders and the director in one day. Reason: according to the law, these procedures require different registration actions and different packages of documents. Be careful or consult with a lawyer in advance.

Related article: Why Can’t Changes To The LLC Shareholders and Director Be Made In One Day?

2. Is there any procedure for making complex changes to the LLC?

The law of Ukraine provides for no procedure of submitting documents for making several changes. You can find only the list of documents to be submitted for making specific changes.

So if you are planning to make several changes, you should first decide which are more important to you and which you need to register faster. For example, if you want to change both the list of the company’s members and director, there are two options:

• The current shareholders may first change the director and then make changes to the their membership.or 

• Perform first the procedure for redistributing shares and then new shareholders may decide on the change of the company’s director and register the changes in the Unified State Register.

You may also like: How To Cost-Effectively Register The Company-Related Changes In The Unified State Register?

Please note! Not all registration procedures shall be performed separately. In fact, there are many types of changes in LLCs that can be made by a single registration procedure. For example, changes to the registered office, types of activity, means of communication and even the director.

3. You should schedule the signing of documents at the notary’s in advance.

If you plan to adopt a decision to be registered in the Unified State Register at the general meeting, it’s worth remembering that the minutes shall be drawn up on a special blank of notarial documents. Of course, all signatures must also be certified by a notary.

In addition, the minutes should also contain a separate agenda item on a person responsible for taking all measures to register changes. As a rule, such a person is a director of the company, whose power of attorney shall also be drawn up on a special blank of notarial documents.

Attention: When changing the company’s director, a new director won’t be able to make all the changes under the power of attorney and substitution. To be more correct, you can document all the changes with the minutes, but you will not be able to implement them in practice.

Why not? The power of attorney from the director must be drawn up on a special blank of notarial documents. This means that the notary first checks the powers of the director. When checking the Unified State Register, the notary sees the name of the current director, and the minutes about the appointment of a new director is not a confirmation of his/her powers. Therefore, the current director shall either issue a notarial power of attorney to dismiss himself/herself and to appoint a new person, or shall personally submit documents to the registrar.

Thus, when changing the director, it is necessary to determine in advance which of them (old or new) will conduct the registration procedure. If the previous director was dismissed on bad terms, there is a high probability that he/she will refuse to issue a power of attorney to carry out registration actions. Therefore, the minutes should explicitly provide that a person responsible for the registration procedure is a newly appointed director.

In addition, when certifying documents by a notary, it’s worth remembering that some documents shall be submitted to the state registrar in their original form. For example, the share transfer and acceptance certificate. If you want to leave some documents, take care of their notarized copy.

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If you want to be sure that all planned changes to the constituent documents of your LLC will be registered without any problems and on the first try, don’t hesitate to call us. We will help you arrange the entire process in advance.