Should you have any questions with regard to the below please feel free to contact Dr A. Tsirat directrly: A.Tsirat@jvs.com.ua
Licensing of companies' activity
Company Law
Ukrainian Law defines a company as any enterprise that carries out an enterprise activity with the purpose of gaining profit. Enterprises in Ukraine may be created in the form of companies as well as in the form of private enterprises.
The Civil Code, Commercial Code and Laws of Ukraine “On Companies”, "On State Registration of Legal Persons and Natural Persons - Entrepreneurs" are the principal laws which govern the necessary procedure in the creation and activity of a variety of enterprises and companies. Most current enterprises in Ukraine were created in the form of companies of various kinds. Increasingly, business entities such as Joint Stock Companies and companies with limited liability are developing in Ukraine. The Law of Ukraine “On Companies” also provides for the possibility of the establishment of limited partnerships, full enterprises and companies with additional responsibilities. Such enterprises are created very seldom and only when it is directly prescribed by the legislation (for example, only full enterprises may conduct the Lombard activity).
Types of companies:
1. Company with limited liability (LTD)
LTD may be founded by one or more natural or legal persons;
The Charter of the company is the main establishing document of an LTD. Founders may agree to conclude a written agreement on company incorporation;
Founders of a company with limited liability should declare a share capital, the amount of which is defined by mutual arrangement. The Law defines only the minimum amount of share capital of a LTD which corresponds to 100 minimum salaries. The amount of minimum salaries for July 2006 is 375 UAH which corresponds to USD 75.
Founders should pay not less than 50% of the declared amount of the share capital by the date of registration of the company. The share capital should be paid in full within 1 year from the date of registration of the company.
2. Open Joint stock companies (OJSC)
According to the Civil Code, a Joint Stock Company may be founded by one or more natural or legal persons;
The charter of the Company is the main establishing document;
Shareholders of the Open Joint Stock Company should enter into written Agreements on their intention to create a joint stock company, subscription to shares, holding meetings of Founders and to carry out the procedure of the state registration of the Open Joint Stock Company;
All shares of an OJSC should be distributed among its Shareholders (Founders). The subscription for shares may be carried out only after the payment of the share capital in full by the founders;
Shareholders are obliged, according to the requirements of the State Committee on Securities and Stock Market of Ukraine, to register and publish information on the issuance of shares and later, after subscription, they should register the Shares Issuance;
As with a LTD, the Law establishes only the minimum amount of the share capital of an OJSC, which corresponds to 1250 minimum salaries;
The share capital should be paid in full within 1 year from the date of registration.
3. Closed Joint Stock Companies (CJSC)
Shares of Closed Joint Stock Companies are assigned exclusively between the Founders of the Company and cannot be freely disseminated through open subscription. A CJSC may emit only registered (inscribed) stocks. Issuance of shares is to be registered at the State Committee on Securities and Stock Market of Ukraine;
As with companies with limited liability, the Law establishes only the minimum amount of the share capital of a CJSC, which corresponds to 1250 minimum salaries;
The share capital should be paid in full within 1 year from the date of registration.
Registration of companies
Common provisions for the creation of enterprises (companies) and their State Registration are stipulated by the Civil Code, Commercial Code, the Laws "On Companies” and "On State Registration of Legal Persons and Natural Persons - Entrepreneurs".
The place of registration is dependent upon the location of the governing body, head office of the company or the person who acts on behalf of the company on the basis of the company’s charter or law (director).
According to the law, the registration term can not extend for more than 3 working days from the date of submission of documents for registration. The following documents are to be submitted for registration:
- Charter (Agreement on company incorporation - if necessary), duly signed and certified with a notary;
- Decision of the owner(s) to create the enterprise (minutes);
- Registration card filled in in triplicate;
- Receipt that the registration fee is paid;
- Document (the bank extract), confirming payment of part of the statutory fund in the case of companies;
- If the founder is a foreign legal entity, the document confirming registration of this entity in the country of its place of business and registration, should be submitted. This document should be notarized, legalized and translated into the Ukrainian language.
The registering authority issues a Certificate of State Registration, together with the Charter (Agreement) and other documents (certificate of the registration with the Tax authorities and social funds).
After the completion of the procedure of state registration, the enterprise should apply, in sequence, to the following authorities:
1. Statistics Authority - to receive a certificate in the prescribed form that confirms the fact of entering the enterprise to the Unified State Register of Enterprises and Organizations of Ukraine;
2. Local Tax Inspectorate - to enter the registered enterprise into their register as a value-added tax payer or to receive a certificate of the enterprise with the simplified system of taxation;
3. Permit Authority - to receive permission to make seals and stamps;
4. Special Organizations - to order such seals and stamps;
5. Bank Authorities - to activate an opened temporary bank account.
Licensing of the companies' activity
Licensing is the procedure necessary to obtain permission to conduct certain kinds of business activity. It is forbidden to conduct specified types of activity without such permission (license).
Conducting or participating in such an enterprise activity without a license will result in financial sanctions for the enterprise and criminal liability for its executive officers.
The Law of Ukraine "On the Licensing of Certain kinds of business activity" stipulates the following activities which are subject to be licensed in Ukraine:
1. the search (prospecting) for minerals;
2. the production and repair of fire-arms, ammunition, cold steel, pneumatic arms more than 4.5 mm. in caliber and with a bullet flight speed of more than 100 m./sec., trade in fire-arms, ammunition, cold steel, pneumatic arms more than 4.5 mm. in caliber and with a bullet flight speed of more than 100 m./sec.;
3. the production of explosives and materials;
4. the production of designated and highly dangerous chemical materials;
5. the mining of minerals from minefields which have national importance and are entered in the National Fund of Entrails of Minerals;
6. the mining of precious metals and precious stones, precious stones of organogenous origin, semi-precious stones;
7. the production of precious metals and precious stones, precious stones of organogenous origin, semi-precious stones;
8. the manufacture of products from precious metals and precious stones, precious stones of organogenous origin, semi-precious stones and the trade in products from precious metals and precious stones, precious stones of organogenous origin, semi-precious stones;
9. the production of medicines and the wholesale or retail trade in medicines;
10. the production of veterinary medicines and preparations and the wholesale and retail trade in veterinary medicines and preparations;
11. the production of pesticides and agrochemicals (only as regulators of plant growth) and the wholesale and retail trade in pesticides and agrochemicals (only as regulators of plant growth);
12. the production of special weapons loaded with substances with lachrymatory and irritating effect, individual protection, active defense and their trade;
13. the development and production of special technical equipment for reading information from channels of communication and other ways of accessing secret sources of information and their trade;
14. the development, production, use, exploitation, certification tests, case studies, examination, import and export of cryptosystems and tools for the cryptographic defense of information and rendering services in the field of cryptographic defense of information (except that of electronic digital signature), together with their trade;
15. the development, productionimposition, certification tests, import and export of holographic elements of defense;
16. the development, production, imposition, service and examination of systems efficiency and the means of technical defense of information together with the rendering of services in the field of technical defense of information;
17. the production of blanks of securities, strictly accountable documents etc.;
18. the transportation of crude oil and oil products by long-haul pipe-line and the transportation of oil and naturall gas by pipe-line including distribution;
19. the supply of natural gas below regulated/unregulated rates;
20. the storage of natural gas in volumes which exceed the rate established by the licensed conditions;
21. centralized water-supply;
22. the development testing, production, exploitation of launch vehicles, space crafts plus spare parts, ground/space infrastructure plus spare parts and equipment which are included in the space sector and satellite systems;
23. the development, production, manufacture, storage, transportation, purchase, posting, import, export, giving out and disposal of drug materials, psychotropic materials and their precursors;
24. cultivation, using plants containing narcotic materials with the purpose of production;
25. the conduct of disinfection, insecticide, rodent control;
26. medical practice;
27. the processing of donated blood and its components and the production of medicines from it;
28. veterinary practice;
29. the organization and keeping of totalizators, gaming institutions, issuance and conducting of lotteries and other gambling activities;
30. construction activity (research and project works for building, erection of lifting and fencing constructions, building and development of engineering and transport networks);
31. rendering services for the air transportation of passengers and cargoes;
32. rendering services for the river and sea transportation of passengers and cargoes;
33. rendering services for motorcars (except rendering services for taxi transportation of passengers and cargoes);
34. taxi transportation of passengers and cargoes;
35. rendering services for railway transportation of passengers and cargoes;
36. the procurement, re-making and metallurgical re-making of scrap-iron of coloured and black metals;
37. the collection and primary processing of wastes and precious metal wastes and precious stones, precious stones of organogenous origin and semi-precious stones;
38. the procurement and re-making of individual kinds of valuable resource wastes plus the collection and procurement of individual kinds of wastes as secondary raw materials;
39. operations in the sphere of the treatment of hazardous wastes;
40. the projection, assembly and technical servicing of the means of fire protection and heating systems plus the evaluation of inflammability status;
41. the fire-resistance testing of substances, materials, building blocks, goods and equipment, including fire equipment in order to ensure compliance with defined requirements;
42. rendering services connected with State and other kinds of property, rendering services for personal security;
43. the fulfilment of topographical-geodesic and cartographic works;
44. the fulfilment of aero-chemical works;
45. the mailing of postal orders, ordinary and registered letters, postcards, wrappers and parcels up to 30 kg;
46. the activities of travel agencies and operators;
47. fitness and sports activity;
48. the organisation and conduct of sports events for professionals and amateurs;
49. activities for the training of sportsmen for the various kinds of sport recognized in Ukraine;
50. the activity of arbitration managers (managers of property, managers of sanitation, liquidation managers);
51. intermediary activity for employment abroad;
52. the conduct of land-tenure regulations’ works, land-estimating works and land auction;
53. drafting projects, building and reconstruction of new and already existing reclamative systems;
54. activities connected with industrial fishing in the industrial sectors of fishing reservoirs, except inner reservoirs;
55. intermediary activities of customs broker and customs transportation;
56. the production of CD discs for digital systems and matrixes;
57. the export and import of equipment and CD discs for digital systems and matrixes;
58. the manufacture of perfumery and cosmetic goods containing ethyl alcohol;
59. the wholesale of seed;
60. the manufacture, storage and sale of pedigree resources, conducting genetic examinations of the origin and abnormalities in animals;
61. the carrying out of disinfection of quarantine materials and objects which are transferred through the borders of Ukraine and quarantine zones;
62. professional activity in the field of granting social services;
63. the drafting of projects and undertaking of works on temporary closure, restoration, rehabilitation and maintenance of monuments and memorials;
64. activities connected with the manufactureand trade in pyrotechnics;
65. activities connected with opening and functioning of shooting-ranges, non-military rifle ranges and hunting stands;
66. activities connected with the manufacture of cars and buses;
67. the development, manufacture, sale, maintenance, modernization and use of armaments, military equipment, weapons and ammunition;
68. the manufacture of thermal energy, its transportation by national and local thermal systems and the delivery of thermal energy;
69. activities connected with the collection, processing, storage, protection and use of information connected with credit histories;
70. the manufacture of chemical sources of power supply, their import, storage and use;
71. the breeding of domestic animals (cats, dogs, exotic and decorative animals) in kennels and the training of dogs and specialists in these fields.
Wholesale and retail trade by an enterprise is possible only after receiving a special trade patent.
