New Ukrainian Corporate Law

On September 17, 2008 the Ukranian legislature, while in the midst of a political crisis, managed to pass a new law which substantially modifies certain corporate formation and corporate governance matters. Below are some highlights of the new statutory provisions. The law is expected to go into effect in early 2009.

1. Increased paid-in capital requirements.

2. Increased amount of the so-called "reserve fund" to 25% of stated capital.

3. New regime on preemptive rights and transferability of preemptive rights by operation of law.

4. Prohibition of in-kind dividends.

5. Restriction on places where a general shareholders meeting can be held. Such meeting is now required to be held at the place of incorporation, subject to certain limited exceptions.

6. Introduction of dual corporate management structure for corporations with over 10 shareholders. Supervisory board is now made mandatory.

7. Introduces the office of corporate secretary.

8. Certain material contracts are now required to be approved by the shareholders.