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SDM Partners concerning Obligations to submit the OWNERSHIP STRUCTURE

7 Temmuz 2021

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 Temmuz 7, 2021
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Member of the Union of Industrialists and Businessmen of Turkey and Ukraine “TUSIB” – law Firm SDM Partners has prepared some clarifications on new issues:

Obligations to submit the OWNERSHIP STRUCTURE

On 11 June 2021, the Order of the Ministry of Finance dated 19 March 2021 No.163, approving the Regulations on the form and content of the ownership structure, hereinafter – “Regulations”, to be submitted to state registrars on the basis of the Law of Ukraine No.361-IX, hereinafter – “Law”. The Regulation will come into force on 11 July 2021.

Thus, all legal entities are obliged:

  1. to submit to the state registrar by 11 October 2021 the valid scheme of ownership structure approved by the Regulation and information on the ultimate beneficial owner of the legal entity under the Form 6 (reasons: paragraph 4 of the Transitional Provisions of the Law) and, if necessary, supporting documents (see below),
  2. in order to confirm information on ultimate beneficial owners, to submit to the state registrar annually, starting from the year following the state registration of the legal entity, within 14 calendar days (grounds: Article 17-1 of the Law of Ukraine ” On State Registration of Legal Entities, Individual Entrepreneurs and Public Associations”) the following materials:
  • ownership structure scheme,
  • form 6,
  • documents confirming the registration of non-resident legal entities that are participants of the legal entity (extract/excerpt from the trade register, etc.),
  • a notarized copy of the document certifying the identity of the ultimate beneficial owner,
  1. within 30 days after the change of information reflected in the scheme of ownership structure, to submit to the state registrar an updated version thereof along with supporting documents (reasons: part 22 of Article 17 of the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Associations”),
  2. when carrying out registration actions, in case of the absence of changes in the information on the ultimate beneficial owners, to notify the state registrar thereabout (by affixing the appropriate mark in the application).

According to the provisions of the Regulation, the ownership structure is drawn up in any form as a schematic image (the Ministry of Finance has placed examples of drawing up such schemes of ownership structure); signed by the head of the legal entity; can be submitted both in written and electronic form, and must contain:

  1. information on all persons who directly or indirectly own the legal entity, individually or jointly with other persons (i.e., the participants of the legal entity, as well as all persons in each chain of corporate rights up to the ultimate beneficial owner, see examples),
  2. information on all persons exercising significant influence over the management or activities of the legal entity,
  3. the amount (percentage of share in the authorized capital or voting rights) of the participation of individuals and legal entities in all persons included in the chain of ownership of corporate rights up to the ultimate beneficial owner,
  4. the size (percentage of share capital or voting rights) and the nature (direct/indirect) of the influence of the ultimate beneficial owners,
  5. for all individuals in the scheme: if a such is a citizen of Ukraine – full name, date of birth, tax code; if such is the foreigner/stateless person – full name and transliteration thereof, date of birth, state of citizenship and residence,
  6. for all legal entities in the scheme: under the law of Ukraine – name and identification code; for foreign ones – name, state of registration, location, applicable identification code.

Based on paragraphs 4-5 of the Regulations, along with the mentioned scheme and form 6, one should also submit by 11 October 2021 certified copies of documents confirming:

  1. the corporate rights of foreign legal entities and foreigners/stateless persons in respect of the legal entity concerning which the ownership structure is formed, if such information is not contained[1] in the Unified State Register,
  2. the grounds for having a significant influence on the management or activities of the legal entity, if neither the Unified State Register data nor the documents submitted to the state registrar contain[2] such information,

The ownership structure scheme and related documents will be available to the Ministry of Justice and state registrars, i.e., will not be subject to public access.

Failure to comply with the requirements for the submission of information about the final beneficial owners entails administrative liability in the form of a fine of 300 to 500 of tax-free minimum incomes (TFMI) (5’100 … 8’500 ₴) under the provisions of Part 6 of Article 166-11 of the Code of Administrative Offenses. Prior to imposition of the fine on the legal entity, the Ministry of Justice will send a request to eliminate the violation within a month.

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[1] Therefore, the submission of supporting documents is necessary for foreign companies / trusts located in the chain of corporate rights between the direct participants of the legal entity and the ultimate beneficial owner.

[2] Thus, the submission of supporting documents is necessary in this case for the ultimate beneficial owners having a significant influence on the management and activities of the legal entity, regardless of the formal participation therein.

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