Ukrainian company founders often wonder whether it's possible to register an LLC in a residential space. According to Ukrainian law, the answer is yes. A legal entity can be registered either in non-residential premises or at the residence of one of the founders (participants). However, there are situations where individuals wish to register a company in a space where none of the founders is officially registered, even if the property is owned by them and remains classified as residential property. Let's explore these various scenarios in more detail.
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Registering an LLC at the apartment of a founder or one of the founders
Registering an LLC in such a manner can be done without difficulties, and it will serve as the legal address for the company. However, for most types of activities, particularly those requiring licensing, the place of business must be a non-residential one. Moreover, many types of activities come with specific requirements for the premises.
Certainly, one does not preclude the other: you will have a legal address, and separately, a physical location where the business operations take place. It's important to consider that primary documents must be stored at the company's registered address. This means that in the event of any inspection, these documents may be requested at your apartment.
Registering an LLC in a residential space where none of the participants are officially registered
It is indeed a common scenario where an individual owns multiple apartments but is legally registered in only one. Consequently, they decide to allocate another apartment for office purposes. However, they may choose not to change its designation from residential to non-residential, as it involves additional administrative work and costs. Moreover, if they later wish to evict the company and house regular tenants, they would need to revert the documents back to residential status. In reality, designating an apartment where none of the founders are registered as the company's legal address is not permissible. However, in practice, people use a workaround: in the registration application, instead of specifying "apartment," they describe it as a "room" or even an "office."
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As registrars are not authorized to request supporting documents, this kind of "trick" often goes unnoticed, resulting in the company being registered at someone's apartment. Fortunately or unfortunately, the likelihood of it being exposed is close to zero, particularly if the company doesn't actually engage in any industrial or other activities that are mandated to occur exclusively in non-residential and specially equipped premises.
Even if this were to surface, there are unlikely to be any significant sanctions (specifically for registering at an apartment designated as an office). It would require someone to go through the effort of proving in court that knowingly false information was presented to the registrar. Generally, the act of registering a legal address doesn't attract much attention. Issues may only arise when the company begins specific economic activities that are required to be carried out in specialized premises.
How crucial is a legal address for a company?
First and foremost, a company is associated with a specific administrative-territorial area and, consequently, a particular tax authority through its legal address. This is why, even in the era of remote work and virtual offices, the legal address retains its significance. Additionally, the address doesn't necessarily have to be specified in the founding documents, meaning there's no need to amend the articles of association when changing the address.
If you need advice on selecting the registration month for your company or organization, feel free to contact our team. We provide legal support for your business, and you can also use our services to purchase a pre-established LLC with VAT registration in Ukraine.
