The Arsenal of your possibilities! Українською in English

tel./fax: + (38 044) 285 07 77
+ (38 044) 285 08 77

About us Structure Our scientific activity Guestbook Contacts Site map
What procedure shall be applied for issuance of securities?

General provisions on issue of securities are expounded in the Law of Ukraine “On Securities and the Stock Exchange”. Article 6 of the Law defines procedure for making decision to issue shares by competent authorities of a joint-stock company.

A decision to issue shares is made by the founders of a joint stock company or by the annual meeting of shareholders.

Such decision shall be registered in the form of a protocol.

The protocol must include the following:

• corporate title and legal address of the issuer;

• the amount of authorized fund or the value of fixed and working assets of the issuer;

• subject and goals of its activity;

• names of the issuer's executives;

• name of the supervisory body (auditing firm);

• information on distribution of securities issued earlier;

• the objective of the issuance; specification of the types of shares;

• number of nominal and bearer shares;

• number of preferred shares;

• total amount of emission and number of shares;

• nominal value of the shares;

• number of those who participated in the voting and its procedure;

• procedure of dividend payment;

• deadlines and procedure for subscribing for shares and procedure for purchase;

• deadlines of reimbursement in the event of cancellation of the issuance;

• priority (if different issuances are planned);

• procedure of announcement about the issuance and procedure of distribution;

• the rights of holders of preferred shares;

• priority right to acquire shares during the next issuance.

 

Under Article 7 of the Law “On Securities and Stock exchange”, a joint stock company may issue shares in the amount of its authorized fund or to the extent of the total value of fixed assets of a state enterprise (in the event of its corporatization). Additional shares may be issued after previous issues of shares were registered and all previously issued shares have been paid for in full at a rate not lower than their face value.

The issuance of shares to cover losses resulting from economic activities of a joint stock company shall be prohibited.

Under provisions of paragraph 11 of Article 4 of the Law “On Securities and Stock exchange”, any share should by regulation have the following requisite elements:

• registered name and location of the joint stock company;

• designation of the security, i.e. “share,”;

• its serial number;

• date of issue;

• type and nominal value;

• name of holder (of a registered share);

• amount of the authorized fund as of the date of issue as well as number of shares issued;

• time limits for payment of dividends;

• signature of the chairman of the board or person authorized to execute the signature;

• corporate seal.

 

A share may be appended with a sheet of coupons that entitle the owner to dividends.

A coupon shall contain the following principal data: serial number of coupon, serial number of the share on which the dividends are paid, title of the joint stock company and year of payment of dividends.

The question on registration of issuance of securities has been regulated by Article 22 of the Law of Ukraine “On Securities and Stock exchange”.

An issuer has the right to issue shares or company bonds as of the moment that issuance is registered with the Securities and Stock Market State Commission. If the shares or company bonds submitted for registration are offered for open sale, i.e. are designed for distribution among legal entities and physical persons not identified in advance, the issuer is obliged to submit information on the issuance of said securities to the registration authority.

The issuer shall be obliged to file with the body which registers securities issue or information on securities issue the balance sheet and the statement of financial position certified by the auditor.

The procedure for registering an issuance of shares or company bonds as well as informing relevant authorities about the issuance is determined by the Securities and Stock Market State Commission (“Provisions on procedure for registering an issuance of shares or company bonds” Act 210 of 20.09.96).

Issuance of any securities shall be registered not later than 30 days from the moment the relevant application and supporting documents were submitted.

Registration may only be refused if established procedure has been violated or submitted documents do not meet legal requirements.

Should registration of an issuance of securities be refused, or not made for reasons which the issuer finds ungrounded, the issuer may go to court.

Registration by the Securities and Stock Market State Commission of an issuance of securities or information about it may not be regarded as a guarantee of their value.

The Securities and Stock Market State Commission keeps a general registry of issuance of securities.

In addition to registration, information on issuance of shares and company bonds to be offered for open sale, is subject to mandatory publication in the press of the Supreme Council of Ukraine and the Cabinet of Ministers of Ukraine, as well as in the official publication of the stock exchange not less than ten days prior to the beginning of subscription for said securities.

Shares and company bonds offered for open sale are accepted for distribution not earlier than 30 days after the publication of an announcement on their issuance.

Should there be any changes in information about an issuance of shares and company bonds offered for open sale, the issuer of securities shall publish an announcement about such changes within 30 days from the day the previous information was published.

Should incorrect or inadequate information be found in the announcement about an issuance of shares or company bonds, the registration authority has the right to suspend their distribution until the issuer makes the necessary amendments in the announcement (Article 23 of the Law “On securities and stock Exchange”).

Circulation of registered shares is recorded in the stock registry kept by the company. Said registry shall contain records of each registered share, including information about the shareholder, time of purchase of shares as well as number of such shares owned by each shareholder. With regard to bearer shares, the registry shall contain a record of the total amount outstanding (paragraphs 3, 4 of the Law “On Securities and Stock Exchange”).

In general, the abovementioned provisions doesn’t contradict the relevant provision relating securities of Chapter 17 of the Economic Code of Ukraine of 16.01.2003. “securities in the economic activity”.

At the same time it must be taken into consideration that:

Part 8 of Article 81 of the Economic Code of Ukraine reads “co-founders shall under any circumstances be obliged to be shareholders in the amount at least twenty-five percent of the authorized fund, for the term at least two years.”

Part 1 of Article 158 of the Civil Code of Ukraine of 16.01.2003 reads “preferred shares give the holder preference right to receive dividends as well as a priority right to participate in the division of assts of the joint-stock company in the event of its liquidation. Holders of preferred shares have no right to participate in the management of the respective joint-stock company unless otherwise provided for by its charter (part 5 of Article 4 of the Law of Ukraine “On Securities and Stock Exchange”). The part of preference shares in the total volume of the charter capital may not exceed twenty-five percent.

About us Structure Our scientific activity Guestbook Contacts Site map
Контакы Nemirovich-Danchenko str., 14/13,
Kyiv, Ukraine 01133
tel./fax:  + (38 044) 285 07 77
+ (38 044) 285 08 77

E-mail: general@arsenal-lf.com.ua
© law firm «Arsenal», 1996-2018
Розроблено у «White Studio»