Types of businesses (institutional-legal forms) in Ukraine
Having decided to start a business in Ukraine every person considers available options. Ukrainian legal system provides for many possible so-called institutional-legal forms, with their peculiarities. Here are presented those institutional-legal forms of business, which are available under current legislation, starting from the most popular and ending with those which fall within special needs and therefore appear less frequently. Some of the institutional-legal forms, which could be set up only by Ukrainian state or Ukrainian citizens and thus cannot be interesting for private business, are omitted:
Entrepreneur - natural person - code 340
This type of business is very easy to start and operate compared to other institutional-legal forms. For foreign citizens prior to state registration as entrepreneurs are obliged to get a taxpayer identification number, which is issued by the State Tax Inspection of Ukraine. State registration of entrepreneur does not result in a creation of legal entity. An entrepreneur acts on his/her own behalf and is fully liable for his/her obligations.
Limited liability company (LLC) - code 240
Limited liability company could be set up by only one person (founder) or several founders, the number of founders is not limited according to the legislation currently in force. Founders shall create the company's authorized capital. It can be any amount in the national currency of Ukraine - hryvnas, as minimum or maximum amount of authorized capital is not regulated by law. Contributions of the founders to authorized capital could be made whether in monetary or non-monetary form during 6 months from the date of state registration (timelines could be adjusted by the Charter of the LLC). After state registration founders become members of the company, which have corporate rights. These corporate rights could be transferred to third parties as a gift or under a sales agreement or succession. Members with a share of up to 50% are free to leave the company without consent of other members, being paid their share by the company. Members of LLC are liable for the LLC's obligation only within the limits of their authorized capital and have a right to receive dividends.
Non-governmental organisation (NGO) - code 460
NGOs cannot be called businesses, as their main goal should not fall within profit gaining. However, it is an institutional-legal form and could optionally be or not be registered as a legal entity. NGO could be founded only by natural persons (not legal entities), the minimum quantity of founders - 2 persons. Foreign citizens can also act as founders of NGO.
Joint-stock company - code 230
The authorized capital of a joint-stock company is divided into shares of similar nominal value, which are security papers. Under current legislation, there are two types of joint-stock companies - private and public. Public offer of shares can be made only by public joint-stock companies. The joint-stock company can be set up by only one person, the maximum quantity of founders/members of a joint-stock company is not limited by law. The minimum amount of the authorized capital of a joint-stock company amounts to 1250 minimum salaries (currently minimum salary amounts to 3723 hryvnas, however, it increases on a regular basis). Thus, at the moment when this article is written, the minimum authorized capital of a joint-stock company in Ukraine amounts to 4 653 750 hryvnas.
Private enterprise - code 120
Private enterprise could be founded/owned by 1+ person. It should also create an authorized capital, which minimum/maximum amount is not regulated by law, thus left at the full discretion of the founders/owners. The difference between LLCs and Private enterprises is that the former are much better regulated by law, and that owners of the latter can take part in the enterprise's activities without employment relations.
Foreign enterprise - code 170
A foreign enterprise is a unitary or corporative enterprise created under the legislation of Ukraine, which operates solely on the basis of the ownership of foreigners or foreign legal entities, or an active enterprise acquired in full ownership of these persons.
Additional liability company (ALC) - code 250
Regulation of additional liability companies is similar to limited liability companies. The difference between these two is that in additional liability companies the founders/owners establish the additional amount, which is not subject to contribution to the company's authorized capital. However, owners of ALC are liable for the company's obligations not only within their contributions but also within that additional amount.
Full company - code 260
All the members of the full company are taking direct part in ints activities and are liable for the company's obligations with all their assets.
Limited partnership - code 270
The limited partnership is somewhere in-between the LLC and the full company: - it has full members, who take a direct part in the partnership's activities and are liable for the partnership's obligations with all their assets, and it has members, who participate in partnership only within their contribution.
SEE ALSO THE FOLLOWING PUBLICATIONS:
LLC formation and registration in Ukraine
We provide integrated service of formation and registration of limited liability companies (LLC) in Ukraine, which includes:
preparation of all the documentation necessary for the formation and state registration of LLC in Ukraine in two languages - Ukrainian and English;...