At the current stage of business development, many business decisions involve legal risks. These include making changes to a company’s constitutional documents, signing contracts, buying or selling a company or shareholding, leasing, and entering into financing or leasing arrangements.
Corporate legal support for a company’s activities or even legal assistance with a specific transaction can help you avoid numerous risks, penalties, and financial losses. Let us look at the subject comprehensively, from the basic concepts to practical recommendations, with references to Ukrainian legislation.
What is corporate legal support?
Corporate legal support is comprehensive legal assistance for your company (LLC) in corporate governance matters. This includes initial corporate documents such as the articles of association, minutes of general meetings, and shareholders’ resolutions, as well as the admission or withdrawal of shareholders, change of the director or registered office, distribution of profits among shareholders, and corporate agreements. This helps ensure compliance with applicable legislation and provides ongoing protection of the business owners’ interests.
Transaction assistance is a more specific area of corporate legal support covering the process of entering into contracts and transactions — from conducting counterparty due diligence and preparing the agreement to participating in negotiations, signing the documents, and supervising their performance. These may include commercial agreements (supply, contracting, lease), corporate transactions (sale and purchase of a share, corporate agreements), or investment transactions.
These areas are closely connected: without proper corporate documentation, it can be difficult to complete a share transaction safely, while an inadequately drafted contract creates risks as early as the performance stage.
Legal framework: key provisions
Key legislative acts:
- Civil Code of Ukraine (in particular, Articles 202–208 concerning transactions and Articles 638–641 concerning the conclusion of contracts, essential terms, and form). A contract is considered concluded when the parties have reached agreement on all essential terms in the required form. Transactions between legal entities generally require a written form. - Law of Ukraine “On Limited and Additional Liability Companies” No. 2275-VIII (Article 7 — corporate agreement, Article 11 — articles of association, as well as provisions concerning charter capital, shareholders’ rights and obligations, and the transfer of shares). A corporate agreement allows the relationship between shareholders to be regulated more flexibly than through the articles of association.
- Commercial Code of Ukraine and special laws (including legislation on joint-stock companies) — for certain types of business transactions.
Taking these legislative requirements into account helps minimize risks such as having a transaction declared invalid or being refused state registration or registration of corporate changes.
Corporate legal support and transaction assistance: a complete guide from A to Z
*Legal analysis and due diligence. Everything depends on the client’s objectives: comprehensive counterparty due diligence through public registers, as well as an analysis of financial standing, pending litigation, tax liabilities, and rights to assets. For corporate transactions, this includes legal due diligence of constitutional documents, corporate resolutions, and ultimate beneficial ownership information.
*Document preparation and negotiations. Preparation of a Term Sheet and Non-Disclosure Agreement, as well as a Letter of Intent for cooperation. This also includes preparation of a draft agreement taking into account the essential terms (subject matter, price, deadlines, and the parties’ liability). Initial preparation of the articles of association, corporate agreement (Article 7 of the Law of Ukraine on LLCs), and shareholders’ resolutions.
*Legal review, amendments, and approval. Legal analysis of potential risks, approval of the final versions of documents, and verification of the signatories’ authority. If a share in an LLC is sold, notarization and registration of the relevant changes in the Unified State Register will be required.
*Long-term strategy and protection. Business development planning, preparation for inspections, advice on day-to-day legal matters, and updating corporate documents in response to changes in legislation.
Practical tips from lawyers
1. Record essential terms in writing from the outset. This significantly reduces the risk of negotiations breaking down.
2. Always have a corporate agreement in place. It can establish in advance the mechanisms for admitting or withdrawing shareholders, pre-emptive rights in the event of a share transfer, and procedures for resolving deadlocks — which can be far less costly than litigation later.
3. Check all relevant public registers, tax records, and the history of changes involving directors and shareholders. Hidden debts or unresolved disputes are common sources of problems after a transaction.
4. Always verify the signatories’ authority. Lack of proper authority is a classic ground for challenging a transaction.
5. Choose the transaction structure carefully. A share sale and an asset sale may have different tax and registration consequences. Calculate the implications in advance.
6. If your business is expanding, consider retaining a professional lawyer on an ongoing basis. Frequent changes of legal counsel can result in the loss of important company-specific knowledge and, ultimately, financial losses.
Our professional advice
Corporate legal support and transaction assistance are not unnecessary expenses — they are an investment in the long-term stability of your business. They can protect you against risks such as invalid contracts, corporate disputes, loss of assets, and unnecessary tax liabilities. If you are planning a transaction or want to establish systematic legal support for your company, consult professionals who work in accordance with the current provisions of the Civil Code of Ukraine and the Law on LLCs. Properly prepared documents today mean greater peace of mind for a business owner tomorrow.
