On 19 July 2017, the Law of Ukraine “On Amending Certain Legislative Acts of Ukraine regarding Use of Seals by Legal Entities and Individual Entrepreneurs” dated 23 March 2017 comes into force. The Law stipulates that the imprint of a seal may no longer be a mandatory requirement for a document filed by business with state or local government. It shall not result in any legal consequences whether the imprint of the seal is available or missing on the document.

The Law further removes certain gaps in legislative acts which defined the seal as a mandatory requirement of certain documents (e.g. powers of attorney issued by the business) and explains how the copies of documents filed by the business with the state and local governments shall be attested An officer of the state and local government can no longer require an imprint of the seal or notarial attestation of copies of documents, unless such is required by law, or refuse to accept the documents for the above reasons. The Law also established administrative liability for illegal requirements of officers of state and local governments to the documents filed with such governments.

However, neither the Law nor other legislation stipulates how the business which has the seal may surrender using the seal and affix a document only with a signature. If the business has been filing returns, statements and other documents with an imprint of the seal with state and local governments and banks, then there is a risk that such governments and the banks may refuse to accept future documents without the seal, because the governments and the banks historically know that the business has been operating with the seal, and they cannot independently verify whether the business in fact ceased using the seal because there is no relevant procedure. For example, if the existing business operating with the seal would like to make a new bank signature card, the bank will likely ask to affix it with the seal.

Also please note that if the business has the seal, by virtue of the Tax Code of Ukraine (the TCU) any statements and copies of documents being filed to the fiscal authority (Articles 20.1.2, 44.7, 85.4 and 85.8 of the TCU) and tax returns (Article 48.3 of the TCU) shall be attested with the seal.

Based on applicable law, an argument can be made that the business apparently should operate in one mode only – either always with the seal and signature or always with the signature only. In our view, a business registered after 19 July 2017 may operate without the seal; while the existing businesses which have seals will unlikely be able to operate in all instances without the seal, as there is a risk that state and local governments and banks will continue demanding the imprint of the seal. For this reason, until there is implementation practice for operation without seals or until relevant official explanations are made, the business cannot be recommended to get rid of its seals immediately.