On 13 January 2015, the Parliament of Ukraine passed Draft Law No. 1310 On Amending Article 41 of the Law of Ukraine "On Joint Stock Companies" (regarding the quorum for holding the general shareholders' meetings of the joint stock companies, in which the state owns the majority of the corporate rights) (the "Law"). The Law will come into force after signing by the President of Ukraine and official publication.
Currently, the Joint Stock Companies Law dated 17 September 2008, as amended, provides that a shareholders' meeting requires a quorum of at least 60% of the voting shares in a joint stock company (a "JSC") for the meeting to be considered duly convened. Once the Law becomes effective, the quorum requirements for the general shareholders' meetings of JSCs, in which the state owns 50% or more of the voting shares, will be decreased to 50% plus one share.
Adoption of the Law was driven by two key factors: (i) by the need to stop and further prevent the shareholders owning an aggregate of 40% or more of the voting shares in the state-owned JSCs from blocking the shareholders' meetings, which in turn leads to the inability to approve strategically important decisions for the state-owned JSCs; and (ii) by the quest to bring Ukrainian corporate legislation closer to European standards which provide for lower quorum requirements.
According to publicly available sources, during the hearing at which the Law was passed, the Ukrainian Parliament backed the proposal to extend the new quorum requirements envisaged by the Law to all other JSCs as well, but, as opposed to the state-owned JSCs, – only with effect from 1January 2016. This will have to be confirmed once the final text of the Law is officially published.
All JSCs will be required to update their charters in due course to bring them in compliance with the Law.
Law: Draft Law No. 1310 On Amending Article 41 of the Law of Ukraine "On Joint Stock Companies" (regarding the quorum for holding the general shareholders' meetings of the joint stock companies in which the state owns the majority of the corporate rights).