The number of participants in an LLC is not limited by Ukrainian law. Today, you can establish a Limited Liability Company with just one person (participant) or create a multi-member company. In this article, we'll delve into some aspects of registering an LLC with multiple participants.
How many participants can an LLC have, both minimum and maximum?
The minimum is one, as mentioned earlier, but there is no maximum limit. It's worth noting that there used to be a cap on the maximum number of participants in a company. Back then, if the number of LLC members exceeded the limit set by law, the company had to reorganize into a joint-stock company.
However, there is no such limit now, and founders who subsequently become participants can number in the hundreds, five hundred, or even more. This is the case even though the statutory capital traditionally consists of 100% of the shares. In other words, participants can own even less than 1% of the share.
How does the number of participants in an LLC affect it?
Firstly, it affects the ease and speed with which you can convene a general meeting of participants. Additionally, it can influence the cost associated with notarizing documents signed by participants, as notarizing each signature tends to be more expensive. For instance, a document like a protocol with just one or two signatures typically costs around 800 UAH on average. However, for every subsequent signature, there might be an additional cost ranging from 100 to 250 UAH.
According to the law, a quorum must be met to make specific decisions. This means that a certain number of participants must be present at the meeting. The types of decisions are categorized into three groups: unanimous decisions, majority decisions, and ¾ majority decisions. So, if there are only two participants, and one of them is unavailable or unresponsive, it can create a critical situation. In such cases, the LLC may become paralyzed, unable to make any decisions, even if they are of utmost importance and require immediate attention.
If there are more than two participants, and their ownership shares are distributed around 30-33% for each, the departure of one participant from the LLC can also pose challenges, as, for significant matters, decisions may be made by a majority vote. However, it's important to note that for important decisions, unanimous or ¾ majority agreement is still required.
Decisions that are made unanimously include:
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Redistribution of shares.
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Establishment of new governing bodies for the company.
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Acquisition of shares by the company.
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Recording or discontinuation of recording of shares in the share ownership system.
Decisions that require a three-fourths majority vote include:
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Making amendments to the charter, including transitioning to the model charter.
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Changing the size of the charter capital.
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Termination (liquidation).
How does the registration process for a multi-member LLC in Kyiv work?
If you place trust in all your partners and have chosen to establish a joint LLC, there shouldn't be any issues related to the number of members during the registration process. You will need to collectively notarize the company's charter and designate someone to oversee its registration. At the agreed-upon time, all participants can visit the notary and collectively sign the approved charter.
Please note! Each participant must issue a notarized power of attorney to the individual responsible for submitting the registration documents.
What should be done if one of the participants is unable to personally visit the notary and sign the document? In such cases, they can issue a power of attorney at any notary and delegate it to an authorized person who will sign the charter on their behalf. We can serve as these authorized individuals and offer comprehensive assistance with LLC registration, including the development of founding documents.
Do you have any remaining questions or are you ready to avail of our services? Feel free to give us a call! Our team is prepared to be your reliable partner in handling your legal affairs.
