Draft
Ban on using apartments for purposes other than those proposed
The Civil Code proposed to prohibit the use of apartments in block of flats for purposes other than those intended, including as offices, hotels and other temporary accommodation facilities.
The Verkhovna Rada Committee on Construction considered the appropriate Draft Law No. 5473 On Amendments to Certain Legislative Acts of Ukraine regarding Use of Apartments in Blocks of Flats and recommended that it be adopted in the first reading. The document, in particular, prescribes that residential property can be used as an office only by its owner if the latter works alone and has no employees, and if his/her “economic activity” does not interfere with other residents. That is, even a freelancer who works at home should ask permission from their neighbors. In all other cases, the use of residential property for offices or hotels is proposed to be prohibited completely.
Ukrainians face a fine of 2,000-3,000 non-taxable minimums (UAH 34,000-51,000) for violations. And if a person gets caught for a second time the sum is UAH 51,000-85,000.
Nowadays it is a common practice to open offices and hotels in residential houses in Ukraine. The country has no clear legal interpretation of whether a person can use an apartments for purposes other than those intended.
Reorganization of medical institutions
State and municipal health institutions will be reorganized to become state-owned enterprises and public non-profit enterprises. The process of such reorganization will be simplified. In particular, simplification will affect the procedure of renewal of licenses and other permits. It is planned to establish a number of incentives, including financial ones. The main objective is to create a network of state and municipal health care institutions with a sufficient level of independence. This is provided for in Draft Law No. 2309a-d On Improvement of Legislation on Health Issues, which is ready for the second reading and is approved by the Verkhovna Rada Committee on Health. The reform is planned to be implemented by 2018.
Tax burden on heat supply companies reduced
The government has approved the Draft Law On Amendments to the Tax Code of Ukraine Concerning Tax Treatment of Companies that Provide Utility Services. Issues regarding taxation of companies providing utility services will be resolved taking into account a payment mechanism by installments for centralized heating services by the population. The tax burden on heat supply companies will be reduced, peculiarities of a tax period are taken into account and stable operation throughout the year will be ensured.
New draft on LLC proposed
Draft Law No. 4666 On Limited Liability and Additional Liability Companies provides for regulation of the legal status of limited liability companies and additional liability companies, procedure for their creation, operation and termination. Rights and obligations of members of companies will also be regulated. So, an LLC will not be limited in the number of members, which will enable existing companies that are limited to transfer to this legal form.
Members will be involved in company management processes and will be empowered with broad powers to protect their rights and to have an impact on management. Members will be able to narrow their circle by buying out shares of those members who do not show interest in company activities and do not participate in general meetings. The absence of limitation on maximum number of members will simplify and mitigate processes to optimize the number of members and extensive rights will make it impossible to apply abusive practices of pressure and coercion during these processes.
The institution of corporate agreements (shareholder agreements) will be introduced. It is proposed to resolve any conflict between rights of a member to freely use its voice and the need to ensure fulfillment of obligations under agreement by setting the opportunity to fulfill obligations under such agreements by way of penalty. A gratuitousness agreement requirement shall reduce the risks of capture of control over society and conspiracies between certain groups of members against other members.
Legislative initiatives on stock market
Draft Law No. 5592 On Amendments to Certain Legislative Acts of Ukraine (regarding information disclosure in the stock market, improving process of issuance of securities and expansion of opportunities for raising capital) proposes the following changes:
— improves the procedure for issuing securities (CB), requirements for execution and publishing of CB prospectus, and also defines exceptions, under which execution of the prospectus is not required;
— brings requirements regarding the language and content of information in the prospectus in line with standards set in EU legislation;
— improves requirements to information disclosure in the stock market and implements a differentiated approach to the volume and frequency of information disclosure by the issuer in the stock market;
— expands the list of methods of information disclosure, including by means of authorized persons’ services, and removes requirement to mandatory publication in printed media; expands the content of annual reports of the issuer by way of including the management report and report on corporate management;
— introduces obligation and procedure for information disclosure of change in share ownership, size of threshold amounts that are established by a project, and introduces a mechanism of such information disclosure by the issuer and other participants of the stock market.
Provisions that provide the possibility for general meeting to adopt corporative decisions on non-use of shareholders’ preemptive right to purchase additional shares; that improve the functioning of company bodies, in particular, of the Supervisory Board and its committees, in accordance with best international standards and EU regulations, were added to the draft.
The final provisions of the draft law provide a simplified mechanism to change the form of limited company from being a public one to a private one.
