Legal Entities There is a vast row of alternatives for those who are planning to start business activity in Rivne region. When establishing a company, foreign investors mostly use the following legal entities:
- joint-stock company
- limited liability company
- representative office
Other less common possibilities are partnership, general partnership, double liability company and joint activity (without establishing of a legal entity).
A joint stock company (JSC) is a legal entity whose share capital is divided into a number of shares of equal nominal value. The liability of shareholders in a JSC is limited to the value of their capital contribution.
A JSC may be established as an "open" or "closed". Shares of Open JSC may be distributed through public subscription and can be floated at stock exchange, contrary to those of Closed JSC which are distributed between its founding shareholders.
The authorized capital of JSC should be equivalent to 1250 monthly minimum wages for the date of registration. According to the Law «On the State Budget 2008» the minimum wage is 525 UAH (April, 2008), and will be 545 UAH (October 1, 2008), 605 UAH (December 1, 2008).
The issued shares of JSC (open and closed) must be registered with the State Securities and Stock Market Commission of Ukraine, which prolongs the registration process approximately for two months.
A limited liability company (LLC) is a legal entity in which participants own a defined by the Charter percentage in the company's capital.
The Charter capital of a LLC should be equivalent to 100 monthly minimum wages for the date of LLC establishment.
For a 100% investment, using a LLC form tends to be more convenient. In comparison to a JSC, it is easier and quicker to establish, since no registration with the State Securities and Stock Market Commission of Ukraine is needed. Moreover, for setting up of a LLC lower minimum capitalization is required and its members may withdraw their contributions at any time by giving three month's notice.
Representative office is not a legal entity and acts on behalf of the foreign company it represents. There are commercial (for restricted entrepreneur activity) and non-commercial representative offices (for preparatory or auxiliary activity in the region). |
