Publication date: 28.06.2024
Liability of LLC founders
A limited liability company (LLC) is a popular form of business in Ukraine due to the limited liability of its founders. However, despite this limited liability, LLC founders may still be held liable for certain actions or omissions. In this article, we will look at the main aspects of LLC founders' liability, legal aspects, and recommendations for legal support.
Legal framework
National legislation
The liability of LLC founders in Ukraine is regulated by the Civil Code of Ukraine, the Commercial Code of Ukraine, the Law of Ukraine "On Limited and Additional Liability Companies", as well as other regulatory acts. These acts define the rights and obligations of the founders and provide for liability for violations of the law. Legal advice will help you to understand the provisions of these acts in detail and ensure compliance with them.
International standards
Ukraine is obliged to comply with international standards in the area of corporate governance and founders' liability. This includes the recommendations of the Organisation for Economic Co-operation and Development (OECD), World Bank documents and other international agreements aimed at ensuring a fair business environment. A legal analysis of the documents will help to understand how international norms can be applied in the national context.
Types of liability of LLC founders
Administrative liability
The founders of an LLC may be administratively liable for violations of the laws governing corporate activities. This may include fines for violations of accounting rules, non-compliance with financial reporting standards, violation of licensing conditions and other administrative offences. Having your documents reviewed by a lawyer will ensure that they are properly executed and comply with the law, which will help you avoid administrative sanctions.
Civil liability
Civil liability of the founders includes the obligation to compensate for damages caused to third parties as a result of the LLC's activities. This may include compensation for damage caused to contractors by failure to fulfil contractual obligations or violation of other legal provisions. Consulting a lawyer will help you properly assess the risks and minimise possible losses.
Tax liability
The founders' tax liability lies in the timely payment of taxes and duties to the state budget. Failure to pay or late payment of taxes may result in fines and penalties. A written consultation with a lawyer will help you prepare your tax returns correctly and ensure that they comply with the law.
Criminal liability
Founders of an LLC may be criminally liable for serious violations of the law, such as tax evasion, fraud, illegal business activities and other crimes. Criminal cases against LLC founders are tried in court, and the penalties may include fines, restriction of liberty or imprisonment. A legal analysis of the situation will help determine whether there is a risk of criminal liability and take measures to minimise it.
Responsibility for the activities of the LLC
Responsibility for management decisions
The founders of an LLC are responsible for management decisions that may affect the company's financial position and reputation. This includes making decisions on investments, entering into contracts, managing financial flows and other aspects of the business. Legal advice will help ensure that management decisions are in line with the law and the interests of the company.
Liability for management actions
The founders of an LLC may be liable for the actions of the management if they fail to ensure proper control over the company's activities. This may include liability for misconduct by managers, financial mismanagement and other violations. Legal analysis of documents will help determine whether proper control measures have been implemented and take steps to minimise risks.
Protection of the rights of LLC founders
Appealing against decisions of the authorities
In case of disagreement with a decision of a government authority imposing administrative or tax sanctions on an LLC, the founders have the right to appeal against this decision in an administrative or judicial procedure. Legal advice will help you prepare the necessary documents for appeal and present your case in court.
Protection of rights in corporate disputes
The founders of an LLC may face corporate disputes arising from conflicts between shareholders, violation of the rights to manage the company, distribution of profits, etc. Legal advice will help to resolve corporate disputes in pre-trial or court proceedings, ensuring the protection of your rights and interests.
Legal assistance and support
Consultations and legal support
Legal assistance is an important aspect of doing business and ensuring that LLC activities comply with the law. Consulting a lawyer will allow you to promptly resolve all legal issues that arise in the course of your business. An online lawyer can provide advice at a time convenient for you, which will allow you to quickly get the necessary legal support.
Written advice and legal analysis
Our legal opinion of a lawyer, legal opinion and legal analysis is what you need to successfully run a business as an LLC. With the "legal analysis of the situation" and "written consultation" services, you get a full package of services that allows you to be confident in the legality of your actions and the protection of your rights.
Conclusions
The liability of LLC founders is an important aspect of doing business in Ukraine. It is important to know your rights and obligations, as well as the legal regulation mechanisms, to ensure an adequate level of support and protection. Legal advice will help you prepare documents, submit reports and avoid possible violations.
Our legal opinion of a lawyer, legal opinion and legal analysis is what you need to successfully resolve legal issues related to running a business as an LLC. With the "legal analysis of the situation" and "written advice" services, you get a full package of services that allows you to be confident in the legality of your actions and the protection of your rights. Legal advice and legal analysis of documents will ensure that the documents are properly executed and comply with international standards. This helps to avoid mistakes and ensure successful protection of rights and freedoms.
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