|
Company Law
Ukraine's company law recognizes five business organizations: the joint stock company, limited liability company, additional liability company, full liability partnership, and limited liability partnership. The first two are currently the most commonly used form of business organizations in Ukraine.
One of the greatest weaknesses in the existing law is the protection of shareholder rights. Shareholder rights are commonly defined as the right (i) to participate in a company’s affairs through attendance at shareholder meetings and voting rights, and (ii) to participate in profits in the form of dividend payments and claims upon liquidation of the company. The fiduciary duties that in most legal systems run from directors to shareholders are totally lacking. The responsibility of general managers/directors to the shareholders is limited to gross negligence only.
The complexity and cost of procedures for registering a business has been a persistent problem in Ukraine. The simple act of officially registering a business has grown into a complicated multi-stage procedure requiring extensive time and money. While this situation may have been just an annoying nuisance for rich, established firms, it created an insurmountable barrier to some entrepreneurs struggling to begin operations.
(Note: This information was taken from the Company Law chapter of the 1999 Ukraine BizCLIR report. For more information, please see the report.)
|
