Agriculture is one of the leading industries in Ukraine’s economy. Successful entrepreneurship in the agricultural sector is impossible without legal support from professional lawyers, as every aspect of an agricultural company’s operations must comply with legal requirements.
For instance, establishing a new company or acquiring an existing business requires expertise in corporate law. If foreign investments are involved in business development, knowledge of investment legislation is essential. Like any business, agricultural companies must correctly manage tax accounting and pay taxes on time and in the proper amount, which necessitates an understanding of tax law. When exporting products abroad or importing agricultural machinery into Ukraine, expertise in customs and international trade law is required. If a contractor fails to pay for delivered goods, it may be necessary to file a lawsuit to recover the debt, which demands experience in commercial procedural law. And this list goes on.
It is clear that the head of an agricultural enterprise cannot be an expert in all legal nuances across various areas of legislation, as their primary responsibility is managing the production process and conducting commercial activities to generate profit. Even having an in-house lawyer may not be sufficient to effectively handle all legal matters faced by an agricultural company, as no single person can be equally proficient in commercial, land, tax, corporate, and customs law while also being well-versed in administrative and criminal procedures.
Therefore, the best solution in such cases is to seek assistance from a team of professionals—a group of attorneys and legal experts who provide systematic legal support for agribusiness.
LEGAL SUPPORT FOR THE ESTABLISHMENT AND ACQUISITION OF AGRICULTURAL COMPANIES includes a wide range of services, among which the following can be highlighted:
- Selection of the optimal legal and organizational form for conducting agricultural business;
- Development of statutory and other corporate documents for the establishment and registration of an agricultural business, as well as legal support in interactions with government authorities;
- Registration of agricultural companies in various legal and organizational forms;
- Establishment of corporate governance in the agricultural sector;
- Tax planning for agribusiness activities;
- Legal audit (Due Diligence) of agricultural enterprises before acquisition;
- Legal support for transactions involving the transfer and acquisition of corporate rights, including the formalization of the purchase of an entire (integrated) property complex;
- Obtaining approvals from the Antimonopoly Committee of Ukraine for business concentration;
- Consultation on taxation issues, identification and minimization of potential legal risks associated with the purchase and sale of agricultural enterprises, as well as legal support for asset purchase and sale transactions.
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 enterprise, it is first necessary to determine the legal form, name, location, business activities (according to the classification of economic activities – KVED), the size and distribution of the authorized capital among the participants, and appoint a company director.
At the next stage, the required set of documents must be prepared and submitted for state registration of the legal entity. Immediately after submission, the registrar must provide a receipt with an access code, which allows downloading the registration extract and charter from the official website of the Ministry of Justice of Ukraine (https://usr.minjust.gov.ua/content/free-search) once the registration process is complete.
If you decide to establish an agricultural enterprise in the form of a limited liability company (LLC), its charter must include:
- The full and abbreviated name of the company (if applicable);
- The management structure, its competence, and decision-making procedures;
- The conditions for joining and leaving the company.
The charter may also contain other provisions that do not contradict the law.
From the moment of registration, the company automatically operates under the general taxation system. To register as a VAT payer or switch to the simplified tax system (if legally permitted), the company must prepare and submit the necessary documents to the relevant tax authority.
At the beginning of negotiations between the business seller and buyer, the buyer typically has only a general understanding of the seller’s assets, their legal status, financial performance, and outstanding debts. Therefore, at this stage, both parties need to agree on a roadmap—the fundamental terms of the business asset sale procedure.
The key aspects to be agreed upon include:
- Estimated value of assets, their composition, quantity, and other essential business or asset parameters;
- Planned structure of the purchase agreement, approximate deadlines for signing and executing the deal;
- Scope and timing of information disclosure, including corporate rights, assets, liabilities, and other details relevant to the buyer;
- Designation of responsible contact persons from both sides for the preparation of the agreement and provision of documents for legal, accounting, and tax due diligence.
Such agreements resulting from negotiations may be documented in writing, for example, in a letter of intent (LOI).
The next stage after signing the letter of intent is conducting legal due diligence to identify potential legal risks for the buyer.
The scope of due diligence depends on several factors, including:
- Corporate structure (number of legal entities and their legal forms, presence of branches, subsidiaries, or representative offices);
- Business specifics (licenses, permits, and regulatory compliance);
- Assets and liabilities (land plots, real estate, production equipment, goods, raw materials, vehicles, securities, trademarks, intellectual property, lease rights, and other assets);
- Financial and economic condition (existing loans, guarantees, mortgages, promissory notes, and bond obligations);
- Existing contracts (number of active agreements, including export/import contracts deemed significant by the buyer);
- Number of employees in the company;
- Litigation and legal risks (ongoing lawsuits, enforcement proceedings).
Thorough due diligence ensures that the buyer minimizes risks and makes an informed investment decision regarding the acquisition of an agricultural business.
An agricultural enterprise can be established in any legal form provided by legislation, such as a private enterprise, a limited liability company (LLC), a private joint-stock company, etc.
According to the law, other members of a limited liability company (LLC) have a preemptive right to purchase a share (or part of a share) that another member intends to sell to a third party. A member wishing to sell their share to a third party must notify the other members in writing, providing details on the price, share size, and other sale conditions.
If none of the members exercise their preemptive right within 30 days from the date they receive the notification, it is considered that they have given their consent. On the 31st day, the selling member is free to transfer the share to a third party under the conditions previously communicated to the LLC members.
After signing the share purchase agreement, the buyer must apply to the state registrar to officially register changes related to the modification of the LLC’s ownership structure.
