Ukraine Law on Joint Stock Companies: Changes to Quorum, Procedure for Dividend Payments and Supervisory Board Authority

    April 2015

    Ukraine Law on Joint Stock Companies (JSCs) has recently been revised in relation to the quorum of general meetings of JSCs, procedure for dividend payments and supervisory board authority, as follows:

    1. Quorum decrease – effective 27 March 2015

      A general shareholders’ meeting is deemed to have quorum if shareholders holding in total more than 50% of voting shares are registered for the meeting. This differs significantly from the previous rule which required a quorum of more than 60% of votes.

      On 13 January 2015, Parliament of Ukraine adopted the law decreasing quorum for joint stock companies providing the change will become effective for public and private JSCs from 1 January 2016. The new law accelerated the change.

    2. Dividend payments – effective 27 March 2015

      The law provides for the general shareholders’ meeting to determine the period for dividend payments. Such period, however, cannot exceed six months from the date of the general shareholders’ meeting decision on dividend payments.

      The law introduces a shareholder’s right to receive dividends, unpaid by a joint stock company within the established time, through a notary executive endorsement, thus allowing the shareholder to claim an undisputed amount of dividends from the joint stock company without initiating court proceedings.

    3. Supervisory board quorum and powers – effective 26 May 2015

      The law abolishes the right to increase the quorum for supervisory board meetings in the charter of joint stock companies. It cannot be higher than the quorum provided by law, i.e., more than one-half of the board members should be present for the meeting.

      In addition, in case of early termination of powers of one or more of supervisory board members, before the election of new members, the supervisory board shall have full authority if the majority of supervisory board members have valid powers.

    We will continue to monitor and inform of changes affecting our clients.