On 23 March 2017, the Ukrainian Parliament voted the Draft Law on the Use of Seals by Legal Entities and Private Entrepreneurs (the “Law”) into law. Within the general framework of business liberalisation, the Law makes the execution of corporate documents simpler and removes the requirement that a corporate seal be used. Many laws still made the use of corporate seals obligatory even after this had been changed from mandatory to voluntary in 2014.
The Law wholly removes the requirement for legal entities and private entrepreneurs to use seals. Even if a company or a private entrepreneur has a seal, they are not obliged to use it. Moreover, no document (e.g., agreement or contract) can be invalidated on the ground that it is not certified by a seal. Generally, affixing a seal to a document or not doing so does not lead to any legal consequences.
Furthermore, state or municipal bodies cannot require that a document submitted to them be certified by a corporate seal, and shall bear administrative liability (a fine up to EUR 60) for violations of this rule. A copy of a document required to be submitted to the state or municipal authorities is considered certified if it is signed by the authorised person of a legal entity or a private entrepreneur. The state and municipal authorities are not entitled to require that such copy be certified by a notary if this is not required by law.
It is anticipated that the adoption of the Law will advance the process of liberalising business in Ukraine. In particular:
a. corporate entities will get a real chance to operate without a seal;
b. the number of disputes related to the use or absence of corporate seals will significantly decrease; and
c. the interaction of corporate entities with state authorities will be simplified.
The Law will come into force three months after promulgation.