Guide for business: annual general meetings

1️⃣ When should shareholders be notified? 

2️⃣ How should a sole shareholder`s decision be formalised?

3️⃣ What should be taken into account when paying dividends to a non-resident? 

The Forvis Mazars team has outlined the key points to help you navigate the process and timely identify issues that may require additional review.

Under Ukrainian law, LLC and ALC (hereinafter – the company) are required to hold an annual general shareholders’ meeting within 6 months after the end of the reporting year, i.e. by 30 June.

The agenda of the annual general shareholders’ meeting usually includes the following matters:

➜  approval of the results of the activity of the сompany;

➜  distribution of the company’s net profit;

➜  adoption of the decision on dividend payment and determination of their amount.

As a general rule, the notice should be sent to the shareholders at least 30 days before the date of the general meeting, unless another term is provided by the company’s charter. The method of notification should also comply with the provisions of the charter.

If any changes are made to the agenda, the shareholders should be informed of such changes no later than 10 days before the date of the general meeting, unless otherwise provided by the charter.

The general shareholders’ meeting usually involves the joint presence of shareholders, or may be held by videoconference, unless otherwise provided by the charter.

The general meeting is held at the company’s registered address. In order to hold the general meeting outside Ukraine, the unanimous written consent of all shareholders of the company is required.

Decisions may be adopted, in particular, in the following ways:

➜  by open voting during the general meeting;

➜  by absentee voting;

➜  by surveying the shareholders.

❗ Important: if absentee voting or surveying is planned, we recommend checking the company’s charter in advance for any restrictions or special requirements applicable to such method of decision-making.

The voting results are recorded in the minutes of the general shareholders’ meeting. The decision is deemed adopted from the moment the minutes on the voting results are prepared, unless otherwise follows from the content of the decision itself.

If the company has one shareholder, annual matters falling within the competence of the general shareholders’ meeting are decided by the sole shareholder individually and formalised in a written sole shareholder’s decision.

❗ Note

Dividend payments to a non-resident shareholder are subject to special currency control regulations, in particular:

➜  payments may be made only from net profit generated from business activities starting from 1 January 2023 (payments for previous periods or from reserve capital are not allowed);

➜  payments may be made exclusively directly from the bank account of the Ukrainian company to the account of the non-resident shareholder;

➜  other restrictions are established by NBU Resolution No. 18 dated 24 February 2022.

How can the Forvis Mazars team help?

General meetings of shareholders

➜  review of the company’s charter with regard to the procedures for convening meetings, quorum, and decision-making;

➜  support in convening and holding annual general meetings;

➜  preparation of notices to shareholders;

➜  preparation of a draft decision of the sole shareholder and/or a draft minutes of the general meeting.

Corporate secretarial (CoSec) and transactional Services

➜  incorporation and liquidation of companies;

➜  support of corporate changes and restructurings;

➜  comprehensive corporate support of M&A transactions.

Dividends and currency regulation

➜  analysis of currency restrictions and regulatory requirements;

➜  assessment of the possibility of paying dividends to non-residents for different periods.

Do you have questions regarding the annual general meetings?
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