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

Any company may face the need to promptly change the management and members of the LLC. This usually occurs, when you sell or buy a company.

In such situations, the desire to carry on all the necessary registration actions within the shortest possible time is quite understandable. Certainly, this also concerns an issue of registration of changes in the company’s membership and management in one day.

Unfortunately, such state registration requests are usually refused. Today we will answer why it is impossible to make such changes in one day and how to solve such issues quickly and efficiently.

What are the main reasons for denial of the in-parallel registration of changes?

The law of Ukraine does not clearly prohibit or restrict an enterprise from submitting documents for changing its director and members at once, but in practice state registrars quite often refuse to accept them.

They mainly explain such refusal by the fact that the requirements to the packages of documents for the change of the LLC’s director and members are stipulated in various parts of the Article 17 of the Law of Ukraine on State Registration. Accordingly, two separate packages of documents shall be submitted.

Difference in the packages of documents for introducing changes in the membership and management of the LLC

The difference in the documents influences the algorithm of the changes registration process and their introduction order.

Documents required for the company director change:

• An application for the registration of changes in the legal entity;
• Documents confirming the due payment of the registration fee;
• An original (or a copy certified by a notary) document on changes to be made in the State Register issued by the authorized body of the enterprise.

Depending on the number of the LLC members, its General Meeting shall make the minutes. Or it may be the decision of the participant (if he/she is the only member of the LLC). Due to recent changes in the registration law, all signatures in the minutes or the member’s decision shall be certified by a notary.

Documents required for the membership changes:

• An application for the registration of changes in the legal entity;
• Documents confirming the due payment of the registration fee.
• One of the following documents confirming the respective change in the LLC membership:

1. Minutes of the General Meeting of the Company on the member (or several members) withdrawal;
2. An application of a person to join this Company as its new member;
3. An application of the member to withdraw from this Company;
4. The act of acceptance and transfer of the share (or part of it).

All signatures shall be certified by a notary.

• Document (an original or notarized copy) confirming the reasons for not taking into account the votes of one of the Company’s members when adopting the decision - in case of voting on making changes to the company membership without taking into account his/her votes for good reasons.

These may be the documents on the reorganization of a legal entity-member or on the death of a natural person- member.

• A document (an original or notarized copy) certifying the right of a person to join a LLC - in case of changes in the company membership due to one or more new participants joining it.

Such a document may be, for example, a certificate of inheritance.

• Consent of other Company members for a new person(s) to be listed as a new member(s) - if such consent is expressly provided for by the LLC charter.

All signature of the members shall be certified by a notary.

• Consent of other Company members for the member (or several members) withdrawal from the Company - if such consent is expressly provided for by its charter or law.

All signatures of the members shall be certified by a notary.

It should also be remembered that sometimes the situation may be complicated by the peculiarities of a particular way of changing the members of the Company.

For example, the law may specify the persons who must submit documents on changing the LLC membership in certain cases:

• a heir or successor of the member - if the member change is registered due to the inheritance or succession;
• a person who withdraws from the LLC (or his/her heir or successor) - when registering a change in the company membership due to withdrawal of one or more members;
• the person who acquired the share (or part of it) of the LLC or the person who transferred it - when registering change of the company membership in parallel with submission of the act of acceptance and transfer of the share (or part of it).

How to address the issue?

When planning the change of the LLC’s director and members, we advise to prepare and submit two separate packages of documents to the state registrar. This will allow you to avoid the rejection of documents and save time for their re-submission.

In practice, the documents on change of the LLC’s director and members shall be submitted as follows:

• First, you shall submit a package of documents for changes in the LLC membership;
• Following the registration of the information about the members in the State Register, you shall submit the package of documents for the LLC’s director change.

With the correct execution of documents and quick work, the entire process can take 2-3 days. You can find information about our company’s respective services here.