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Publication date: 26.04.2024
I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.
Authorized capital is a set of monetary or property contributions that the founders or participants of the company are obliged to make in exchange for a certain number of shares or shares of the company. This capital is fixed in the charter (or memorandum) of the company and is an important element for the formation and functioning of the enterprise. Authorized capital acts as a guarantee for creditors that the company has sufficient resources to meet its financial obligations. In addition, it also reflects the value of the enterprise and determines the amount of own resources available for running the business. The authorized capital can be changed in the course of the company's activity through various procedures, such as increasing or decreasing the capital, issuing new shares or shares, changes in the articles of association, and other actions provided for by law. Ukrainian legislation establishes rules for the formation of authorized capital for various types of enterprises. Here is general information about this process in Ukraine:
Types of enterprises: Ukrainian legislation provides for various forms of enterprises, such as limited and unlimited liability companies, joint-stock companies, etc. Each of these types may have its own rules regarding authorized capital.
The minimum amount of authorized capital: The legislation establishes the minimum amount of authorized capital for one of the types of economic company, namely a joint-stock company, the minimum amount of authorized capital of which must be 1250 minimum wages.
Contribution to the authorized capital: The founders (members) of the company must contribute to the authorized capital. It can be a monetary contribution or a property (real estate, movable property, etc.) that is valued according to the law.
Contribution procedure: Contributions to the authorized capital are usually made before the registration of the enterprise.
Company registration: After making contributions to the authorized capital and corresponding documentation, the company is registered in accordance with the legislation of Ukraine. This process is carried out by the relevant government agencies, usually the Department of Justice.
General aspects of the concept of "contribution to authorized capital":
Expression: the nominal value of a partner's share is expressed exclusively in hryvnias. Along with this, the deposit participant can make a contribution in foreign currencies.
Contribution amount: Participants (founders or shareholders) must contribute a certain amount of money or property to the authorized capital of the company. This amount is usually specified in the company's articles of association or memorandum.
Form of contribution: The contribution can be made in the form of money, property (for example, real estate, machinery, intellectual property, etc.), or services, if permitted by law and by the company's articles of association. If a non-monetary contribution is made, it will be subject to a monetary assessment.
Time of contribution: The contribution must normally be made before the company is registered and obtains legal status. For example, when forming the authorized capital of an LLC, a VAT, participants must make their contributions in full within 6 months after the registration of the company.
Deposit Procedure: The contribution should normally be deposited into the company's bank account or in another authorized manner, which is established in the articles of association or memorandum of the company.
Emergence of powers: From the moment of making a contribution to the statutory capital, a member of the company receives a certain amount of rights and obligations. In particular, this concerns the ability to manage the company (participate in general meetings and have the right to vote at them), receive part of the profit in the form of dividends, as well as receive part of the company's property in the event of its liquidation. We should also not forget about the rights that directly result from the fact of making a contribution to the authorized capital, namely: the priority right to make an additional contribution and thereby increase your share, the priority right to purchase a share from another participant, as well as the right to receive the value of the contribution made leave the company.
Legal services for business in the formation of authorized capital:
A business lawyer will accompany the company at each of the stages of its creation, and such an important stage as the formation of authorized capital requires a legal protection of business. In particular, a business lawyer will analyze the requirements of the legislation, take into account the company's peculiarities, its organizational and legal form, and, based on this, will provide advice on the formation of authorized capital. A lawyer for business may also be needed in case of changes to the statutory capital, i.e. in the process of its increase or decrease, as for this it is necessary to make changes to the founding document and properly register them.
