Draft Law on Harmonization of Ukraine’s Company Legislation with EU Legislation Registered

On January 6, the Verkhovna Rada registered Draft Law No. 12376 on amendments to certain legislative acts of Ukraine regarding further harmonization of company legislation with the legislation of the European Union.

According to the explanatory note to the document, within the framework of Ukraine’s acquisition of full membership in the EU, Ukraine has undertaken to ensure full alignment of national legislation with EU acts, including in the field of corporate governance and company activities.

Objectives of the Draft Law:

– to improve the provisions regulating the procedures for making changes to information about a legal entity contained in the Unified State Register;

– to introduce procedures that will ensure gender balance among officials of joint-stock companies;

– to ensure the implementation of a policy encouraging long-term participation in the capital of joint-stock companies by establishing requirements for the policies of institutional investors and asset managers as shareholders in accordance with EU standards.

Main provisions of the Draft Law:

– possibility of holding repeated general meetings of shareholders and determining their procedure;

– introduction of additional requirements for the procedures of selection and appointment of officials of joint-stock companies to maintain gender balance;

– provision of specific procedures for appealing acts (decisions) of the management bodies of joint-stock companies and their officials on issues of gender protection;

– establishment of requirements for the policies of institutional investors and asset managers as shareholders;

– possibility of entering information into the Unified State Register regarding the change of the head and the size of the authorized capital of business companies using electronic services through the infrastructure of the Central Depository.

The draft provides for amendments to the Commercial and Procedural Code of Ukraine, the Laws of Ukraine “On Joint-Stock Companies”, “On Capital Markets and Organized Commodity Markets”, “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations”, “On Non-State Pension Provision”, “On Collective Investment Institutions” and “On Insurance”.

Proposals for holding repeated general meetings of shareholders

A repeated general meeting of shareholders may be convened by the person convening the general meeting of shareholders within three business days after the date of the general meeting of shareholders that was not held.

The agenda of the repeated general meeting of shareholders is identical to the agenda of the general meeting of shareholders that was not held.

Proposals for maintaining gender balance

A joint-stock company that is an enterprise of public interest and a joint-stock company in whose authorized capital more than 50 percent of the shares belong to the state must ensure that at least:

1) one third of the board of directors consists of representatives of each gender – in the case of a one-tier management structure of the joint-stock company;

2) 40% of the members of the supervisory board or executive body consist of representatives of each gender – in the case of a two-tier management structure of the joint-stock company.

These requirements do not apply to joint-stock companies in which, according to the latest annual financial statements, the average number of employees is less than 250 people and which meet at least one of the following criteria:

– book value of assets is less than EUR 43 million;

– net income from sales of products (goods, works, services) is less than EUR 50 million.

Proposals for institutional investors and asset managers

Institutional investors and asset managers shall develop and publish an engagement policy that describes the process through which they integrate their involvement as a shareholder into their own investment strategy.

The engagement policy must include a description of the monitoring of joint-stock companies in which the institutional investor and/or asset manager is a shareholder, at least on the following issues:

1) strategy of the joint-stock company;

2) financial and non-financial performance indicators, risks of such activities;

3) capital structure;

4) corporate governance and sustainable development;

5) communications with the investee company;

6) exercise of voting rights and other rights under the shares of the investee company;

7) interaction with other shareholders of the investee company;

8) communications with key stakeholders of the investee company;

9) management of actual and potential conflicts of interest related to involvement as a shareholder.

The Draft Law is expected to enter into force on January 1, 2026.

Draft Law No. 12376