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Transition shares in the company

Transition shares in the company

Specialists of the Law firm AGTL ready to develop and offer the best options of the transfer shares in the company, as notarized in the transaction, and such transfer of shares which do not entail, according to the law, the notarial form of the transaction, i.e. does not require personal presence of the parties and other interested parties (spouses, persons having a preferential right to purchase DLI, etc.), the notary, and to implement in full support of holding and registration of such changes.

Our advantages

The privacy and safety of the entrusted documents;

insurance against errors and compliance with the terms of the transaction;

flawless documents in the shortest possible time with minimal cost.

Support notary certifies the transaction on alienation of a share in OOO

Deals on purchase-sale of corporate rights (shares, stakes in authorized capital) have become a common way to acquire or dispose of a business (or part of it). Thus, the buyer acquires some control over the company, and, accordingly, the assets owned by him. But for a successful transaction on alienation of corporate rights must know and take into account the peculiarities of its implementation and decoration

Right and content

The contents of the corporate rights and relations defines the article 167 of the Economic code of Ukraine. According to it, corporate law is the right of a person whose share is determined in the Charter capital (property) of economic organization. They include entitlement to this person's involvement in the management of a business organization, receiving certain share of the profits (dividends) and assets in case of liquidation in accordance with the law and other powers, provided they and instruments.

Corporate relations are the relations which arise, change and terminate on corporate rights. This knowledge of the latter is not considered entrepreneurship. However, the law may establish restrictions for certain entities regarding the ownership of corporate rights and/or their implementation. The contents of the corporate rights is a set of managerial competencies and of property character. Management rights are the rights:

•participate in managing the Affairs of the company;

•to receive party information on the activities of the society;

•withdrawal from the society in the prescribed manner.

Patrimonial attributes include the rights:

•to participate in the formation of the Charter capital;

•to dispose of its corporate rights;

•the allotment of the property in the event of withdrawal from the society;

•to receive dividends;

•to receive property and assets upon liquidation of the company.

The right of owners to dispose of their portion of corporate rights in the common property established by the provisions of articles 361-363 of the Civil code of Ukraine. Thus a necessary condition is compliance with the pre-emptive right to purchase shares in right of common share ownership. Such a right to others to buy it at the price declared for sale and on other equal conditions (except in the case of a public auction) and by law the other co-owners.

In this regard, the seller shares in right of common share property is obliged in writing to inform the other co-owners of the intention to sell, specifying the price and other conditions. If other co-owners renounced the pre-emptive right to purchase or not to implement it relatively immovable property within one month, relative to the movable property within ten days from the day they receive a message, the seller is entitled to sell his share to another person.

If there are several co-owners wishing to purchase a share in the right of common partial ownership, the seller has the right to choose the buyer. When selling shares in right of common share ownership with violation of pre-emptive right to purchase the interested co-owner may bring a lawsuit on the transfer to it of the rights and obligations of the buyer. He or she is required simultaneously with the filing of the claim to be paid to the court escrow account the amount of money under the contract must pay the buyer of the shares. It should be noted that to the specified requirements of the applicable Statute of limitations of one year.

A significant caveat in its preferential right to purchase a share in common ownership is that the law does not allow the rights of its transfer to another owner.

With regard to the transfer of share in right of common ownership to the acquirer by the contract, then you need to consider the following. The portion transferred to the acquirer by the contract from the moment of its conclusion, unless otherwise provided by agreement of the parties. In case of alienation of a share under the agreement, which is subject to notarization and/or state registration, she transferred to the acquirer after the implementation of these actions.

Preparing for the transaction of sale of corporate rights, you should consider some important aspects that must be analyzed before a final decision on its conclusion. First of all, you need to take into account the existence of antitrust restrictions stipulated by the Law of Ukraine "On protection of economic competition".

According to him, with the aim of preventing monopolization of commodity markets, abuse of monopoly (dominant) position, restriction of competition, bodies of the Antimonopoly Committee of Ukraine shall carry out state control over concentration of business entities.

In our case, the concentration is the direct or indirect acquisition, acquisition of property otherwise or obtaining control of the shares (stakes, interests) that provides achievement or excess 25 or 50% of the votes in the Supreme management body of the corresponding subject of farming.

Therefore, depending on the specific transaction (size of assets and sales volume of each of the parties) may require the permission of the AMC. They provide to business entities, in their statement of preliminary findings about concentration.

Perhaps early analysis of the situation the parties will be able to limit the receipt of preliminary findings letter — recommendation clarify that the permission for this transaction is not required.

For violation of the Antimonopoly legislation provides for liability in the form of a fine, the amount of which can reach 10 % of the annual income of the enterprise.

It is therefore advisable in advance to develop a corporate transaction arrangement thus, to avoid antitrust violations.

A special approach requires the process of renewal of corporate rights, especially if it's stock. Here you need to consider a special procedure for their registration, storage and circulation.

In addition, the sale of shares is effected through a licensed entity of professional activities on the securities market (securities trader).

Organizational-legal aspects

The process of registration of sale requires a specific preparatory activities. First and foremost, you need to determine the value of corporate rights which are the subject of the transaction. The price is contractual, however, it may vary depending on the form of corporate rights and expectations of the buyer.

In this regard, the first phase of the transaction, experts recommend the buyer to collect information about the company to examine existing documents and the history of its activities. Now information about the acquired business can be gleaned from a variety of sources.

It should also pay attention to the things that can play a decisive role in the fate of the deal and greatly affect its price, namely:

•the history of the enterprise;

•availability of permits for principal activities, which it acts (licenses, patents etc.);

•availability of title documents on real estate (including land plots) which are on balance of the enterprise;

•the ratio of payables and receivables;

•the existence of encumbrances against the property of the company;

•contractual risks (unexecuted contracts; recognized in court, but unpaid penalties, etc.).

For the preparation of a qualified report about the real financial condition of the company, corporate rights which are acquired, it is desirable to involve the auditor (audit firm).

Another important factor that could affect the acquisition value of corporate rights, is the business reputation of the company among the partners.

The following obligatory stage of preparation for the deal — making by the authorized body of the company the decision on the sale of corporate rights. Which body is empowered to make this decision, will depend on the legal form of the enterprise. The decision about the sale must be documented.

The conclusion of the contract

The contract of purchase-sale of corporate rights is in writing. While domestic legislation does not require notarization, except for such cases:

•if notarization insists one of the parties;

•if at least one of the parties to the contract is a natural person.

This is due to the fact that the procedure for registration of changes in the Charter, which in such situations is mandatory, will need to show in the body of state registration a notarized copy of contract of sale. The notary will certify the project with the participation of a natural person only if he notarized the said agreement.

Sale of corporate rights — a very specific transaction, so the drafting of the Treaty text requires a special approach. This should include all essential (necessary for this type of transaction) conditions.

Recommended as clearly as possible to formulate conditions relating to:

•upon transfer of ownership;

•terms of payment;

•the timing of any required legal actions (meeting of authorised members, registration of changes in constituent documents, etc.);

We should not lose sight of measures that ensure compliance with the terms of the contract of purchase-sale of corporate rights. It is useful to provide for the payment of a penalty (fine) for failure to perform a particular action, the involvement of guarantors, Deposit and other stipulated by the legislation of the interim measure. It is necessary to carefully check the credentials of the persons who will sign the contract of purchase and sale as well:

•take into account the statutory right of the founders of the company on preferential acquisition of shares. In order to prevent possible conflicts in the future, the buyer of corporate rights, it is recommended to obtain from each participant a written waiver of preemptive right to purchase shares sold by other parties;

•if the seller of corporate rights is a natural person, the buyer must obtain the written consent to conclude the contract of purchase and sale from the spouse (spouses) of the seller, to avoid the risk of invalidation of a transaction in the context of part 2 of article 65 of the Family code of Ukraine;

•in the above cases to obtain permission from the Antimonopoly Committee;

•the owner of the shares in the limited liability company may dispose of it only if he has fully paid its contribution to Charter capital.