On April 5, 2015 the Law of Ukraine “On Amending Certain Legislative Acts of Ukraine with Respect to Simplification of Business Practices (deregulation)” (hereinafter - the “Deregulation Law”) came into force. The Deregulation Law introduces a number of amendments into the Law of Ukraine “On State Registration of Legal Entities and Individuals-Entrepreneurs” (hereinafter – the “Law on State Registration”) regarding the improvement of registration procedures. For the purposes of implementation of the Deregulation Law, the following subordinate regulations have been adopted: the Resolution of the Cabinet of Ministers of Ukraine no.289-p on procurement of maintenance of electronic system service in the area of state registration of legal entities and individuals-entrepreneurs, dated March 18, 2015, and the Order of the Ministry of Justice of Ukraine no.466/5 regulating the procedure of providing data  from the Unified State Register of Legal Entities and Individuals-Entrepreneurs (hereinafter – the “Register”), dated March 31, 2015.

The key changes introduced by the Deregulation Law into the Law on State Registration, as well as the main novelties envisaged by the subordinate regulations mentioned above are aimed at minimizing the paperwork and reducing the bureaucracy level in the areas dealing with the registration of business entities and obtainment of data about such business entities from the Register. It is expected that these changes will simplify and accelerate the process of registration of new business entities, performance of registration formalities with respect to the existing business entities, and access to the data about such business entities contained in the Register.

In particular, the new legislation envisages:

• Improvement of the system of electronic document flow between the Register and information systems of other state authorities (e.g. statistics authorities, the State Pension Fund, tax and licensing authorities, the National Securities and Stock Market Commission). It is expected that such cooperation between the state authorities will enable to implement “a single window” principle, and, as such, to reduce the administrative burden on business entities.

• Creating conditions for obtainment of extracts (“виписка”), excerpts (“витяг”) and statements (“довідка”) on business entities in electronic form via the respective Internet portal (access via the official web-site of the Ministry of Justice of Ukraine), which is already functioning. Importantly, it is envisaged that extracts, excerpts and statements from the Register, obtained in the electronic form, will have equal legal force with the respective documents obtained in a paper form.

• State authorities, courts, municipal authorities and their officials will be able to obtain the data from the Register solely in electronic form (via the respective web-site). Such data shall be provided free of charge. Similar provisions are established with respect to banks and credit history bureaus. Thus, they will be entitled to formalize an electronic request for information from the Register and obtain the requested information (i.e. extracts, excerpts and statements) also in electronic form. The data will be provided in real-time mode on a paid basis. As a result, it will no longer be required to request such data and documents from business entities, which will allow to reduce administrative burden on such business entities and to save their time.

• The right to obtain extracts, excerpts and statements (both in paper and in electronic forms) from the Register with respect to any business entity will be granted to any person, provided that extracts on individuals-entrepreneurs may be granted only to such individual-entrepreneur himself or to his legal representative. All the documents will still be provided on a paid basis (except for the state and municipal authorities). The fees, however, are quite low and vary from 19 UAH to 61 UAH (depending on the type and the form of the document requested). It should be noted that online access to the data from the Register remains available and free of charge. Thus, unless a person is requesting the information in some specific form (i.e. as an extract, excerpt or statement), s/he can always access the data from the Register via the respective link. Importantly, the scope of information on a business entity available online is practically identical to the information that contains in extracts.

• Information on registration formalities that, according to the law, have to be disclosed, shall be made publicly available via the official web-site of the Ministry of Justice. Previously, such information had to be published in official printed media.

Also, the Deregulation Law provides for the possibility to back out of the principle of linking the place of performance of registration actions to the registered address of a business entity. Thus, in case of a military conflict, temporary invasion, mass cases of violence or breach of human rights, natural and man-made disasters, registration formalities can be preformed by state registrars determined by the Ministry of Justice and located outside the places of registered address of legal entities and registered place of living of individuals-entrepreneurs.

The reform of the registration of business entities is still ongoing. Thus, on April 7, 2015 the Parliament of Ukraine has adopted certain changes to the Law on State Registration regarding improvement of the procedure of termination of legal entities as the result of reorganization (merger, accession, division, conversion) - the draft law no. 1416 dated December 11, 2014 (hereinafter – the “Draft Law”), which has not yet come into force. The changes proposed by the Draft Law, include, inter alia, the following[1]:

• Possibility to re-register separated business units (i.e. branches, representative offices) of a terminating legal entity to its legal successor – without the necessity of their prior closing.
• Abolishment of prohibition to perform certain registration formalities (i.e. introducing amendments to the charter or to information on separated business units  of a legal entity, establishing new legal entity by a  terminating legal entity) with respect to legal entities terminating as a result of reorganization. The Draft Law, however, envisages keeping the above restrictions only for legal entities terminating as a result of a liquidation (i.e. without legal succession).

In addition to the above, the Parliament of Ukraine is currently considering draft law envisaging mitigation of risks related to performance of registration formalities based on forged documents. The respective draft law (no. 1475 dated December 16, 2014) contemplates performance of registration formalities (e.g. altering charter or changing management of a legal entity) based on the originals of the respective corporate decision (current version of the Law on State Registration provides for the possibility of performing such registration formalities also based on copies of such documents).