Draft Law of Ukraine

“On Amendment of the Law of Ukraine “On Business Associations”

This draft proposes to foresee in the Law “On Business Associations” a possibility for calling repeated general meeting of joint stock companies’ stockholders, including instances when the first general meeting (regular and irregular) is recognized as invalid because of quorum absence. According to the proposed amendment repeated meeting shall be recognized competent if stock holders owning more than 50 % stock take part in it.

Pursuant to applicable norms of the Law “On Business Associations” stockholders owning at least 60% of stocks shall be present at general meeting to have quorum. However, it should be noted that the Law “On Business Associations” does not provide for concept of ‘repeated general meeting’.

Should the parliament approve this draft there will be expanded possibilities of individual decision making by those shareholders who own stakes of 50%-60% of joint stock company’s shares. It should be noted that owners of non-control stock practically will not any possibility to bloc those decisions of general meetings, which are disadvantageous for them.