The Law of Ukraine “On Amending Certain Legislative Acts of Ukraine Relating to Identification of Beneficial Owners of Legal Entities and Public Officers” No. 1701-VII dated 14 October 2014 (the “Law”) came into effect on 25 November 2014. In accordance with the Law:
Disclosure of Beneficial Owners
Companies are obliged to disclose information about their beneficial owners. A beneficial owner of a legal entity is a natural person who, irrespective of formal ownership, has a possibility to exercise decisive control over the management or commercial activity of a legal entity, either directly or through other persons.
Until now, founders of newly incorporated companies were obliged to disclose to the state registrar information on their shareholding structure allowing the state registrar to identify ultimate owners of significant interest. Such information, however, was not included into the publicly accessible sector of the Unified State Register. If the beneficial owner was not a formal owner of the relevant shares, his/her disclosure was not required.
Upon enactment of the Law, founders of the newly incorporated legal will also be obliged to disclose information about their beneficial owners, and such information will be included into the publicly accessible sector of the State Register.
Existing legal entities must disclose the said information until 25 May 2015.
The Law does not address the cases where one of the founding legal entities (or an ultimate owner of the founding entity) is a public company where, by definition, owners of significant interest may not be identified.
Liability for failure to comply with the Law’s requirements as to disclosure of beneficial owners is limited to an administrative fine of UAH 5,100 – 8,000 imposed on the company’s director.
Unveiling the State Register of Property Rights to Immovable Property
Information on owners of immovable property becomes public and available on the official web-site of the State Registration Service provided that the title to the relevant property is registered in the State Register of Property Rights to Immovable Property. The public search may only be made by the property’s address. A search by the owner’s name may be made by the authorized public organs and the notaries.
Noteworthy, information on most objects of immovable property exists only in paper form in the municipal archives and in the State Land Cadastre. The Law does not provide for a digitalization of this information and its transfer from the said locations to the State Register. Thus, only information entered into the State Register after 1 January 2013 upon the owners’ initiative will become publicly available.