UKRAINE Law and Practice Contributed by: Illya Tkachuk, Igor Krasovskiy and Inna Kostrytska, INTEGRITES
business combination should be considered in light of the potential tax requirements. 5.4 Timing and Tax Authority Ruling The procedure for the spin-off depends on the form of the company. Generally, the spin-off in a limited liability company is a much easier pro- cess compared with a joint-stock company, as there is no need to deal with the share issuance. In any case, a spin-off procedure requires the completion of a tax inspection, which can be unreasonably delayed in practice. As a result, the length of the entire process may vary from three months to even a year. 6. Acquisitions of Public (Exchange-Listed) Technology Companies 6.1 Stakebuilding It is not customary in Ukraine to acquire a stake in a public company before making an offer. Most technology companies are registered as limited liability companies. In this respect, the law does not provide for any reporting obliga- tions as they are private companies. As for the joint-stock companies, Ukrainian law only specifies the procedure for a mandatory offer, which is designed as a post-acquisition step. Thus, an acquirer (or group of acquirers acting together) of a controlling stake (more than 50%) or significant controlling stake (more than 75%) of shares in a public joint-stock company is obliged to make an offer to purchase minor- ity shareholders’ shares once the acquisition is completed.
The reporting obligations for an acquirer of a stake in a public joint-stock company include the following, in particular. • Notification of the company about the inten- tion to acquire 5% or more of shares and making such notice public by reporting it to the National Securities and Stock Market Commission (and all stock exchanges where the companies’ shares are allowed for trad- ing) and placing it in the database of a special disclosing agency. Such notification must be made at least 30 days before the acquisition. • Pre- and post-notification requirements apply in connection with the acquisition of a controlling stake (more than 50%), signifi- cant controlling stake (more than 75%) or a dominant controlling stake (more than 95%) of shares. • Notification of the company and the National Securities and Stock Market Commission about any acquisition of shares that results in reaching or exceeding the thresholds of 5%, 10%, 15%, 20%, 25%, 30%, 50%, 75% or 95% of voting shares. The purchaser is not obliged to state the pur- pose of the acquisition of the stake and its plans or intentions with regard to the company. 6.2 Mandatory Offer Direct or indirect acquisition of a controlling stake (more than 50%) or a significant control- ling stake (more than 75%) of the ordinary shares of a joint stock company – solely or in concert with other persons – obligates the acquirer(s) to make a mandatory offer to minority sharehold- ers to purchase their ordinary shares (see 6.1 Stakebuilding ). There are, however, certain exemptions from the mandatory offer obligation – for example, where
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