The concept of legislation reformation in the scope of corporative law

The UBA Corporate Law and Stock Market Committee draws attention of the legal community and the public to the Concept of legislation reformation in the scope of corporative law.

According to the concept we suggest to conduct the corporate law reform in conformity with the following principles:

  • Corporate law deregulation: The law about Ukrainian limited liability companies should include all the advantages of joint-stock form, so any non-public joint-stock company (i.e. company whose shares have no listing at exchange markets) will get an opportunity to re-register as limited liability company not loosing all the benefits of joint-stock form, but getting rid of all its burden. For example, attracting of stockholder capital to joint-stock company should be as easy as in case with LLC. In this way we can have the universal division of companies into two categories: private and public.
  • The raise of dispositivity level of corporate law, in particular its part that regulates private companies. Company members should have an opportunity to step aside the regulation of dispositive law norm by their consensus decision. For example, if at the time of creation company members have agreed that no one can leave the company in a one-way fashion or for a reason that is not specified in a statute, then this decision of the members will be respected by law. A norm of "residuary effect" (i.e. the norm which is applied if there is no other contradicting provision) will be a law provision that allows a member to leave the company at any moment without explanations.
  • The rise of corporate management standards which is achieved by means of imperative status of norms about obligations and liability of directors and norms which protect minority shareholders in cases when they haven't used self-protection means (i.e. the capability to raise the standards of their protection using the potential of dispositive norms).