Before 11.10.2021 you have time to update the data about the ultimate beneficial owner

First, under item 4 section X of The Law of Ukraine "On Prevention and Counteraction to Legalization (Cancellation) of Income, Withheld Criminal Causes, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Reduction", a legal entity registered to enter into force of this Law, that is by 28.04.2020, submit information to state registrar about ultimate beneficial owner, to the extent specified by this law and ownership structure during 3 months from the date of entry into force of the regulatory legal act, which will approve the form and content of the ownership structure.

State registrar set data about ultimate beneficial owner of a legal entity based on such documents (p. 1 Art. 17 of the Law of Ukraine “On State Registration of Legal Entities, Private Entrepreneurs and Public Formation”):

• ownership structure by the form and content determined in accordance with the law;
• extract, excerpt or another document from the commercial, banking or court register, etc., proving the registration of a non-resident legal entity in the country of its location, in the event that a non-resident legal entity is the founder of the legal entity;
• a notarized copy of the document certifying the person who is the ultimate beneficial owner of the legal entity, - for a non-resident individual and, if such a document is issued without the use of the Unified State Demographic Register, - for a resident individual.

Secondly, starting from 2022, legal entities have a duty to yearly confirm information about the ultimate beneficial owner.

For confirming information about ultimate beneficial owner annually, starting from the next year from the date of state registration of a legal entity, during 14 calendar days the following documents are submitted (Article 17-1 of the Law of Ukraine “On State Registration of Legal Entities, Private Entrepreneurs and Public Formation"):

1) statement confirming the information about an ultimate beneficial owner;

2) ownership structure according to the form and content as determined by the legislation;

3) extract, excerpt or another document from the commercial, banking or court register, etc., proving the registration of a non-resident legal entity in the country of its location, in the event that a non-resident legal entity is the founder of the legal entity;

4) notarized copy of the document certifying the person who is the ultimate beneficial owner of the legal entity, - for a non-resident individual and, if such a document is issued without the use of the Unified State Demographic Register, - for a resident individual.

Thirdly, legal entities shall be obliged to keep information on an ultimate beneficial owner and ownership structure up to date, update it and notify the state registrar about changes within 30 working days from the date of occurrence thereof and submit documents confirming these changes to the state registrar. If there are no changes in the ownership structure and information about an ultimate beneficial owner of a legal entity, legal entities shall be obliged to notify the state registrar about the obscene of such changes during the state registration of any changes to the information about the legal entity contained in the Unified State Register (Part 22 of the Article 17 of the Law of Ukraine “On State Registration of Legal Entities, Private Entrepreneurs and Public Formation”).

At the same time, the form and content of the ownership structure are established by the central executive authority, which ensures the formation and implementation of state policy in the field of preventing and counteracting to legalization (laundering) of the proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction, in coordination with the Ministry of Justice of Ukraine (part 24 of Article 17 of the Law of Ukraine "On State Registration of Legal Entities, Private Entrepreneurs and Public Formation").

11.06.2021. in the newspaper “Government Courier” (No. 111) was officially published Order of the Ministry of Finance of Ukraine dated 19.03.2021 No. 163 "On approval of the Regulations on the form and content of the ownership structure".  This order came into force from 11.07.2021., so during 3 months from the date of entry into force of the specified circulation, that is until 11.10.2021, all legal entities are required to submit the ownership structure form in accordance with this order to the state registrar.

Ownership structure on its form is an official document, which is a structure schematic representation of the property of the legal entity, which reflects everyone, who directly or indirectly own this person independently or with other people and regardless of formal possession have the possibility of significant impact for management or activities of legal entity (Item 3 Regulations on the form and content of the ownership structure, approved by Order of the Ministry of Finance of Ukraine dated 19.03.2021 No. 163).

Samples of drawing up a schematic representation of the ownership structure are published on the official website of the Ministry of Finance.

Moreover, ownership structure can be created independently using the constructor InstaDoc.

Also, from 11.07.2021. there are new forms of application in the field of state registration of legal entities, individuals - entrepreneurs and social formations take into force:

• Form 2 “Application for state registration of legal entities (except public organizations and authorities)";
•   Form 4 “Application for state registration of legal entities – public organization;
•   Form 6 “Application confirming information about ultimate beneficial owner legal entity”

These updated application forms have been put into effect based on the Order of the Ministry of Justice of 29.06.2021 No. 2320/5 "On amendments to the Order of the Ministry of Justice of Ukraine of November 18, 2016 No. 3268/5".

According to Part 6 Article 166-11 of the Code of Administrative Offenses of Ukraine, for failure to submit or late submission to the state registrar of the provided information By The Law Of Ukraine "On State Registration of Legal Entities, Private Entrepreneurs and Public Formation" information about the ultimate beneficial owner of a legal entity or its absence, or documents to confirm information about the ultimate beneficial owner of a legal entity-entail imposition of a fine on the legal entity’s head or a person authorized to act on behalf of a legal entity (executive body), from one thousand to three thousand non-taxable minimum incomes of citizens.

Therefore, liability for failure to submit or late submission to the state registrar of information about an ultimate beneficial owner and ownership structure, failure to maintain such information in up to date, and failure to update such information is punishable by a fine from UAH 17,000.00 up to UAH 51,000.00, which is applied to the legal entity's head or an authorized person.

However, it should be noted, that all specified changes in accordance with Item 9, Part 2, Art. 9 the Law of Ukraine “On State Registration of Legal Entities, Private Entrepreneurs and Public Formation” do not apply to political parties, structural formations of political parties, trade unions, their associations, trade union organizations provided by the statute of trade unions and their associations, creative unions, local branches of creative unions, employers' organizations, their associations, bar associations, chambers of commerce and industry, associations of co-owners of apartment buildings, religious organizations, government agencies, local governments, their associations, state and municipal enterprises, institutions, organizations).

Sample of the ownership structure prepared by the lawyer Natalia Krasnokutskaya (Instagram @advocate_knn, Facebook instaADVOCATE).

The lawyer provides legal consultations on Business Support issues:

• in any Messenger by cell number +380969900861
• in the Instagram direct @advocate_knn or in the Facebook Messenger instaADVOCATE.
• by email [email protected] 

To get your first free online consultation, sign up for the lawyer's Instagram account @advocate_knn and like the Facebook page of lawyer Natalia Krasnokutskaya instaADVOCATE.