On 2 November 2016, a law aimed at improving the effectiveness of anti-raiding measures became effective (the “Law”). The Law intends to mitigate and, where possible, eliminate the risk of corporate raids as well as reduce the risk of the fraudulent takeover of immovable property.
The major changes provided by the Law include:
(1) the introduction of a mandatory notarisation of signatures on the statutory documents and decisions (minutes) of the general meeting of shareholders (participants) of legal entities;
(2) the introduction of clear instructions on how shareholders’ (participants’) decisions should be formalised;
(3) an obligation on state registrars to verify each court decision submitted as a ground for the registration action by checking its authenticity in the Unified State Registry of Court Decisions, and decline any registration action where there is non-compliance;
(4) the introduction / strengthening of criminal liability against state registrars and malefactors (for abuse of powers, illegal takeover of property and forgery of documents);
The above-mentioned developments shall significantly reduce the likelihood of a corporate raid being successful through the use of fake court decisions and/or forged corporate decisions.
(5) the registration of business and property rights to immovable property will now only be possible within the region where a company/property is situated (i.e. within the oblasts of Ukraine, the Autonomous Republic of Crimea, Kyiv and Sevastopol). To date, the illegal seizure of property was usually undertaken by bribing or using affected registrars located far from the company/property location;
(6) the owner of any immovable property shall now be notified by the state registrar where there are any registration actions being carried out in relation to the owner’s property (the Government of Ukraine shall further clarify how this notification will be carried out).
The above-mentioned changes are aimed at combating raiding and preventing fraud in the sphere of the state registration of business and proprietary rights to immovable property.
Legislation: the Law of Ukraine ”On Amendments to Several Legislative Acts Concerning Improvement of State Registration of Rights to Immovable Property and Protection of Property Rights” adopted by the Ukrainian Parliament on 6 October 2016.