Any business starts with an idea and the development of a legal framework for operation. Entrepreneurship is a process of decision-making and actions to implement a business idea. In today’s rapidly changing market and political environment, it is nearly impossible to achieve positive results from business activities without planning specific actions for implementing business operations and forecasting their future outcomes.
Therefore, the optimal approach is to run a business based on a business plan. For example, if you plan to set up a production line for manufacturing a specific product, you need to consider whether you will use revolving funds such as a bank loan, or whether you will operate the business alone or with partners. Additionally, you will face questions about purchasing equipment for production, acquiring or renting a production facility, hiring employees, paying their salaries, ensuring safe working conditions, and paying taxes. It is clear that all these matters, aside from the business components, require legally significant actions. For instance, raising funds through a bank requires the signing of a loan agreement and a security agreement (mortgage, guarantee). Business relationships with partners, such as the process for making joint decisions or distributing profits, should be regulated in the company’s charter. The purchase of equipment requires a sales contract, while renting production space requires an appropriate lease agreement. Hiring workers to manufacture the products involves signing employment contracts, ensuring workplace safety, paying salaries, and handling tax obligations.
Moreover, certain types of business activities require prior approval from government authorities, as well as obtaining licenses and permits. Therefore, implementing any large-scale business project will inevitably require considering certain limitations and features prescribed by several branches of law, such as simultaneously complying with the rules set forth by commercial, banking, and tax law. Thus, every business plan should be supported by a legally crafted operational framework, as a legally structured business strategy is essential for mitigating risks and successfully implementing a business idea.
A distinctive feature of WinnerLex Law Firm is its business orientation—we exclusively serve businesses. Our clients come from a wide range of industries: trade, manufacturing, agricultural exports, imports, investments, construction, metallurgy, banking, strategic planning, IT, auditing, and modeling businesses.
When providing legal support to startups, we are ready to share our knowledge and accumulated experience, offering answers to legal questions regarding the creation and operation of a business, while taking into account the legal specifics and considerations specific to each type of activity.
By reaching out to us, you protect yourself from the potential need to restructure your newly established business operations in an emergency mode due to lack of timely information about the legal nuances of your specific business sector.
DEVELOPMENT OF A LEGAL WORKING ALGORITHM includes a wide range of services, among which the following can be highlighted:
- Legal analysis of various business activity options, providing the optimal legal framework for the specific business operation;
- Providing recommendations regarding the corporate structure of the company (formalizing relationships between owners);
- Analyzing the licensing components of the business (the need to obtain licenses, certificates, permits);
- Selecting the optimal taxation system;
- Choosing the appropriate organizational and legal form of the company (limited liability company, private enterprise, joint-stock company);
- Drafting the necessary statutory documents specific to the type of business activity;
- Legal consulting on the business formation process;
- Conducting company registration;
- Developing a legal framework for executing various types of transactions;
- Drafting all types of contracts necessary for conducting business;
- Drafting internal company documentation (employment and collective agreements, internal instructions and regulations).
Practice experience: 19 years
Specialization: litigation support, tax, customs and antitrust practices, agricultural law, IT and M&A
Practice experience: 21 years Specialization: support of economic, civil, labor and administrative disputes, energy
Practice experience: 11 years Specialization: tax, customs and corporate disputes, support of inspections, contractual activities
Practice experience: 6 years
Specialisation: business and civil law, tax and customs practice, corporate law, registration and reorganisation of business
Practice experience: 11 years Specialization: support of economic, civil, labor and administrative disputes, inspections
To register a new business, it is necessary to first determine the organizational-legal form, name, location, types of economic activities (KVED), the size of the charter capital and its distribution among the members of the legal entity, and the person who will be the head of the enterprise. The next step is to prepare and submit the relevant package of documents for the state registration of the legal entity’s creation. Immediately after the submission of the documents, the registrar is required to provide a description of the submitted individual documents, which contains an access code. This code can be used on the website of the Ministry of Justice of Ukraine. After state registration, the extract and charter can be downloaded.
When choosing between different organizational-legal forms for a newly established business, it should be considered that the minimum size of the charter capital for a joint-stock company is 1,250 minimum wages, based on the minimum wage rate at the time of the creation (registration) of the joint-stock company. In contrast, the minimum size of the charter capital for a limited liability company is not currently specified by law.
If you have decided to reorganize your business through a merger, acquisition, or division, keep in mind that the supervisory authorities will conduct an unscheduled document inspection of the reorganizing company. Therefore, in such a case, at the very least, measures will need to be taken to bring the company’s tax and accounting records into compliance with the requirements of the law.
At the stage of initiating negotiations between the business seller and the buyer, the latter most often only has a general understanding of the actual composition of the seller’s assets, the correctness of their legal registration, the financial performance, and the status of accounts payable and receivable. Therefore, at this stage, it is important for both parties to agree on a “roadmap” – the basic terms of the future sale and purchase of business assets. Specifically, they should reach mutual agreement on the following elements:
- Estimated value of the assets, their composition, quantitative and other significant parameters of the business or assets;
- The planned structure of the main sale and purchase agreement of assets, approximate timelines for entering into and executing such an agreement;
- Information (documents) that will be provided to the buyer about the business (corporate rights, assets and liabilities, other important information for the buyer), including its scope and timelines;
- Agreement on the contact persons from both parties responsible for preparing the deal and providing documents for legal, accounting, and tax due diligence.
Such an agreement between the parties following negotiations can be formalized in writing, for example, in a protocol of Intent.
Before carrying out any transaction related to the acquisition of corporate rights in a business or the purchase of commercial or industrial real estate, it is necessary to conduct a legal due diligence of the situation surrounding these rights or property – to verify the legitimacy of the current owner’s acquisition of ownership over these rights or property and to investigate the existence of any ongoing legal disputes related to these assets. This will allow the parties to identify and assess any legal risks before proceeding with the transaction.
The time required to develop each legal workflow depends on the complexity and scope of the business issue for which the workflow is to be prepared. Of course, a legal workflow for implementing a specific business transaction, such as purchasing collateralized real estate from a bank, will address fewer issues and require less time to prepare than a legal workflow for establishing an agricultural production and trading enterprise from scratch.
The development of a legal business model involves creating a corporate governance system to protect the rights of business owners, as well as preparing the company’s statutory documents in line with its goals and the specifics of its activities. Lawyers will assist in selecting the optimal tax system (either the general or simplified system according to the requirements of current Ukrainian legislation and depending on the chosen type of business activity and organizational-legal form of operation).
Legal expertise and consulting can also be provided regarding the restructuring of an existing corporate structure (amendments to statutory documents, changes to the charter capital, name, location, re-election of management bodies, and opening or closing branches and representative offices).
The development of a legal business model also includes supporting the creation and registration of legal entities or, conversely, the liquidation of existing legal entities for certain reasons, such as joint-stock companies, limited liability companies, private enterprises, cooperatives, and public organizations.
Services for developing a legal business model are essential for those who have just decided to start their own business. Our lawyers, after listening to and analyzing the client’s ideas about their future business, will help choose the most suitable organizational-legal form for the enterprise, based on legal norms and legal practice. This could be a limited liability company, a joint-stock company, a private enterprise, or another form provided by current legislation (Civil Code of Ukraine, Commercial Code of Ukraine, Laws of Ukraine “On Joint-Stock Companies,” “On Limited and Additional Liability Companies,” “On Cooperation”).
It is also important to carefully choose the types of business activities. A full list of these activities can be found in the Classification of Economic Activities, approved by the order of the State Committee of Ukraine on Technical Regulation and Consumer Policy dated 11.10.2010, No. 457. The choice of economic activity will also affect the tax system. The next step involves carrying out all the necessary actions, general meetings, preparing statutory documents and applications, and submitting them to the state registrar. This issue is regulated by the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs, and Public Associations.”
Services for developing a legal business model can also be useful for already registered enterprises that have not fully determined their tax system or want to optimize taxation. They may also need help resolving other legal issues, such as amending the company’s operational documentation (changing the organizational-legal form or types of activities, changing the name or the director).
