Creation of the Farming Economy in Ukraine

First, let's define what farming is. According to Art. 1 of the Law "On Farming" farming is a form of entrepreneurial activity of citizens who have expressed a desire to produce marketable agricultural products, to carry out their processing and sale for the purpose of obtaining profit on land plots provided to them for ownership and/or use, including for rent , for farming, commercial agricultural production, personal peasant farming, in accordance with the law.

Who can be the founder of a farm? A farm can be created by one citizen of Ukraine or several citizens of Ukraine who are relatives or family members , in accordance with the law.

There are two organizational forms of farming:

• An individual entrepreneur (FOP) or a family business as an individual entrepreneur.
• A legal entity or a family business as a legal entity.

A farm has the status of a family farm, provided that its entrepreneurial activity uses the labor of members of such an economy, who are exclusively members of one family in accordance with Article 3 of the Family Code of Ukraine , namely : wife (husband), parents, children, grandmother , grandfather, great-grandmother, great-grandfather, grandchildren, great-grandchildren, stepmother, stepfather, stepdaughter, stepson, relatives and cousins, uncle, aunt, nephews of both the head of the farm and his wife (her husband), as well as persons who are in family relations of the first degree of consanguinity with all the above-mentioned family members and relatives (parents of such a person and parents of a husband or wife, his or her husband or wife, children of both such a person and his or her husband or wife, including children adopted by them) .

Farming - a natural person entrepreneur.

As for the family farm, before the state registration, a natural person together with members of his family shall conclude a contract on the establishment of a family farm in writing and shall be subject to notarization of the location of the property and land plots of the farm. In the contract according to Art. 8-1 of the law must state:

• a) name, location (address) of the farm, purpose and types of its activities;
• b) decision-making procedure and coordination of joint activities of farm members;
• c) legal regime of common property of farm members;
• d) the procedure for covering costs and distributing the results (profits or losses) of the farm's activities among its members;
• e) the procedure for entering and exiting the farm;
• e) labor relations of farm members;
• e) surname, first name and patronymic of members of the household, the degree of their family relationship, passport data and RNOCPP;

The declaration on the creation of a family farm (in the case of single-person management of such a farm) is made by an individual independently in writing. The head of a family farm without the status of a legal entity is a family member, determined by the contract (declaration) on the creation of a family farm, who is registered as an individual entrepreneur . After concluding a contract (declaration) on the creation of a family farm, the head of the family farm must register as an individual entrepreneur.

A farm is a legal entity.

To register a legal entity, it is necessary to prepare the following set of documents:

• Application regarding the registration of a legal entity of the established model ;
• A document confirming ownership or the right to use a land plot;
• Decision (protocol) on creation of a legal entity ;
• Charter ;
• Passports and TIN of the founder and members of the farm.

Please note that in the absence of a plot of land, according to Art. 122 of the Land Code , the founders of a farm can apply to local executive authorities with an application for the provision of a plot of land for use (rent) .

In addition, when choosing between a sole proprietorship and a legal entity, pay attention to the fact that a sole proprietorship can own no more than 20 hectares of land, a legal entity has no restrictions .

Registration of a farm requires a larger set of documents than an ordinary limited liability company, therefore, when registering, we advise you to contact "Instadok" specialists, who will be able to help you in the following areas:

• registration of FG "turnkey" by proxy;
• support of a specialist during the registration of the FG;
• preparation of draft documents (protocol/decision, charter, application, contract with family members);
• oral consultation on conducting economic activities and taxation.

Also, the following templates may be useful when registering an FG :

• Charter of the farm (newly established) + protocol/decision on creation (Ukrainian), Ukraine ;
• The charter of farming (new edition, amendments to the charter) + protocol/decision (Ukrainian), Ukraine ;
• Contract for the supply of sunflower seeds (Ukrainian), Ukraine ;
• Agreement on the provision of agricultural services, yuo, fop, fo (ukr), Ukraine ;
• Import contract, framework, CPT, FCA, USD or EUR, 100% advance payment (Ukrainian-English), Ukraine ;
• Contract of the commission on the import of goods between legal entities (Ukrainian), Ukraine ;
• Delivery contract (food products, in containers, in batches, according to the buyer's request, credit limit, DDP, VAT) (Ukraine), Ukraine ;