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Why can’t change of membership and the manager of LLC be made in one day?

In the course of doing business a company regularly faces a need for making state registration actions. As one may know, legislation of Ukraine provides for each of the actions a clear list of documents, which is necessary to be submitted to the state registrar. General rules and requirements to the list of necessary documents are provided by the Law on the state registration.

Documents for changing the company’s head

Based on the rules of part 4 of art. 17 of the Law, in order to change the information on the head of the LLC in the official state register, an enterprise must draft and submit to the public registrar the following documents:

  1. Application on registration of changes related to the particular legal entity.
  2. Documents confirming the payment of the state fee for the registration.
  3. The original (or notarized copy) document issued by the authorized body of the enterprise regarding the changes that are to take place in the official state register.

Depending on the number of members in the LLC, this may be the minutes of general meeting or the member’s decision (if he or she is a sole member in LLC).Additionally the signatures of the person who signed the minutes or decision on changes that are reflected in the public register are certified by notary in light of the recent changes in the registration legislation.

Documents for changing the membership

In order to change the Company’s existing membership, a set of documents in accordance with part 5, article 17 of the Law is drawn up and submitted:

1) application for registration of changes in the legal entity.

2) documents confirming the proper payment of the registration fee by the enterprise.

3) one of the following documents, confirming the corresponding change in the membership of LLC:

  • Minutes of the general meeting of members of the Company about exclusion of a member (or several members) from it;
  • An individual’s application about entry in the Company as a new member;
  • Member’s application about his exit from the Company;
  • Transfer and acceptance act of a share in the company (part of share).

Signees signatures in these cases must be necessarily certified by a notary public.

4) A document (an original or a notarized copy), confirming the reasons for failure to take into account votes of one of the company’s members when making a decision - in the context of voting on changes in the membership without taking into account his or her votes for a good reason.

These may be documents about reorganization of a legal entity that is a member or about the death of a natural person who was a member.

5) A document (an original or a notarized copy) certifying the right of a person to join the Company – where the membership is changed due to the entry of one or more new members.

For instance, such document may be a will of a deceased person.

6) The consent of other Company’s members for a new member (members) to join the Company- where the provision of such consent is directly stipulated in articles of incorporation.

As withhe minutes of general meetings and decisions, the members’ signatures on the consent are certified by a notary public.

7) The consent of other Company’s members for the exit of its member (or several members) - where the provision of such consent is directly stipulated in its articles of incorporation or by the law.

The signatures of all members on this consent are also certified by a notary public.

Why cannot the documents on replacement of the director (company’s head) and the members be submitted at the same time?

As shown above, different sets of documents are provided for replacement the Company’s head and its members. Despite the absence of distinct prohibitions and restrictions in the law on the simultaneous submission of documents on replacement the Company’s director and its members, the public registrars in practice often refuse to accept them.

The main motivation for such a refusal is that the requirements for sets of document on replacement of the LLC’s director and its members are stipulated in different parts of Art. 17 of the Law, respectively, two separate sets should be submitted.

Moreover, in some cases, the situation may be complicated by the peculiarities of a particular manner of replacement of the Company’s members. In particular, part five of Art. 17 of the Law provides the persons who submit documents on replacement of the LLC’s members in certain cases:

  • heir or assignee of a member - if the replacement of a member is registered by inheritance or assignment;
  • a person withdrawing from the LLC’s members (or such person’s heir or assignee) - when registering replacement in the membership by withdrawal of one or more members;
  • a person who has acquired the stake (or part thereof) of the LLC or a person who transferred it - when registering the replacement of member with the submission of the act of acceptance-transfer of the stake (or part thereof).

Conclusion

Thus, planning a replacement of LLC’s director and its members, we recommend preparing and submitting to the public registrar two separate sets of documents. This will allow you to avoid refusals in accepting documents and save time for resubmitting them.

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