Resolution No. 1182 of the Cabinet of Ministers of Ukraine dated 16 November 2011 which entered into force on 23 November 2011 approved a model charter of a limited liability company (“LLC”). A model charter of an LLC reflects general provisions of the legislation regulating the activity of LLCs, in particular, the Law of Ukraine “On Business Companies”, the Civil Code of Ukraine and the Commercial Code ofUkraine.

As a reminder, Law of Ukraine No. 3262-VI “On Introducing Amendments to Certain Legislative Acts of Ukraine Regarding Implementation of Principle of State Registration of Legal Entities on the Basis of a Model Charter” dated 21 April 2011 (“Law No. 3262-VI”) came into force on 28 August 2011 and provides for the possibility to register an entity on the basis of a model charter to be approved by theCabinet of Ministers.

According to amendments introduced by Law No. 3262-VI, a model charter of an entity is a typical constituent document used for incorporation and operation of legal entities, and sets forth statutory rules regulating legal status, rights, obligations and relations in connection with incorporation, management and operation of businessactivity by an entity.

If an entity is incorporated and operates on the basis of a model charter, then the resolution on incorporation of such entity should indentify the type of the entity, its name, location, subject and purpose of activity, composition of the founders and participants, amount of the charter capital, size of interest of each participant, and procedure for making contributions, as well as mention that operation is made on the basis ofa model charter.

Thus, starting from 23 November 2011, founders have the possibility toregister an LLC on the basis of a model charter. We note in this regard that if the founders wish to regulate relations among them in accordancewith Ukrainian law but using a procedure other than that envisaged bythe model charter (e.g., limitation of competence of a managementbody, creation of a controlling body, etc.), the LLC would then have tobe registered on the basis of a charter tailored to individual needs.

As far as we know, the registration of LLCs in practice is not conducted on the basis of a model charter because there is no form of the document which the company registrar may issue to confirm that the company is registered on the basis of a model charter. Further, the legislation does not govern situations which require a notarised copy of the charter (e.g., opening of a bank account, obtaining a license, etc.).