Registration of associations of enterprises

The forms of entrepreneurial activity in modern Ukraine are constantly changing, because in today's environment, with the real entry of domestic producers into the European market and growing economic globalization, enterprises are no longer able to function as separate, disparate business entities. To implement their plans, they seek to unite in groups - on various principles: sectoral, territorial or other. Such associations are called business associations. There are features that make them similar to ordinary enterprises (business companies), but a number of features give grounds to consider them a separate group.

Pursuant to Article 118 of the Commercial Code, an association of enterprises is a business organization formed by two or more enterprises (the composition may include enterprises formed under the laws of other states, in turn, Ukrainian enterprises have the right to join similar associations formed abroad) in order to coordinate their production, scientific and other activities to solve common economic and social problems.

It should be noted that associations of enterprises may be established both on a voluntary basis and by decision of the authorities authorized to do so in accordance with the Commercial Code and other laws. Part 1 of Art. 119 of the Commercial Code provides for the division of associations of enterprises, depending on the procedure for their establishment, into purely economic associations and state or municipal economic associations. Importantly, despite the names, the defining feature here is not the form of ownership of the merging companies, as it might seem at first glance, but rather the procedure for their formation - voluntary or compulsory. Business associations are formed both for an indefinite period of time (associations) and temporarily for the purpose of achieving a specific time-limited goal (consortia).

In general, an association of enterprises is a legal entity (Article 118(4) of the Commercial Code). However, this rule does not apply to all types of business associations - for example, an industrial and financial group (Article 125(4) of the Commercial Code), a banking association, a holding group, etc. are not legal entities.

The main types of associations of enterprises:

• association
• corporation
• consortium;
• concern.

An association is a contractual union established for the purpose of permanent coordination of economic activities of enterprises on the basis of pooling financial and material resources by the participants to meet the predominantly economic needs of the association members by centralizing one or more production and management functions, developing specialization and cooperation of production, and organizing joint production. The association has no right to interfere with the economic activities of the enterprises that are its members. By decision of the members, the association may be authorized to represent their interests in relations with the authorities, other enterprises and organizations.

Corporation - a contractual association established on the basis of a combination of industrial, scientific and commercial interests of enterprises that delegate certain powers of centralized regulation of the activities of each of the participants to the governing bodies of the corporation.

A consortium is a temporary association of enterprises for the purpose of achieving a certain common business goal by its members (implementation of targeted programs, scientific, technical, construction projects, etc.), for which the members provide it with their own funds, as well as use centralized resources allocated to finance the relevant program and any other funds received in accordance with the procedure established by its charter. If the purpose of its establishment is achieved, the consortium shall cease to operate.

Concern is an association of enterprises and other organizations based on their financial dependence on one or a group of members of the association, with centralized functions of scientific, technical and production development, investment, financial, foreign economic and other activities. The members of the concern vest it with some of their powers, including the right to represent their interests in relations with the authorities, other enterprises and organizations. Concern members cannot join another concern.

Due to the significant concentration of assets and specific organizational activities that accompany the establishment of an association and automatically create conditions for monopolization, the decision to establish an association of enterprises (the memorandum of association) and the association's charter must be approved by the Antimonopoly Committee of Ukraine in accordance with the procedure established by law.

State registration of an association of enterprises is carried out in accordance with Article 58 of the Commercial Code.

The registration procedure involves: preparing a package of constituent documents; determining the location; notarization; obtaining a certificate of state registration and a charter; obtaining certificates and notifications of registration with the tax service and all necessary funds (Pension Fund, Social Insurance); making a seal; preparing a package of documents for opening a current account in a bank.

The following documents are required from you

• a copy of the certificate of registration of the legal entity;
• a copy of the certificate from the Department of Statistics on inclusion in the EDRPOU;
• a copy of the charter (concerns and consortia) or the memorandum of association (associations and corporations) certified by the founders (Article 120 of the Commercial Code);
• Minutes of the general meeting/decision of the owner on the establishment or incorporation of a legal entity;
• copies of passports and certificates of identification number assignment of officials (manager, accountant) of the new company, a copy of the passport of a similar certificate of the person who will sign documents on behalf of the founder (manager, representative);
• a document confirming the powers of the person who will sign documents on behalf of the founder (protocol/order appointing the head of the legal entity), in case of signing documents by a representative - a notarized power of attorney;
• for a foreign legal entity - a document confirming its registration in the country of its location (extract from the trade/bank register), certified in accordance with the requirements of the legislation of the country of its issuance, translated into Ukrainian and legalized in accordance with the current legislation of Ukraine.

Participants of associations of enterprises may make property contributions (entrance, membership, targeted, etc.) on the terms and in the manner prescribed by their constituent documents and raise funds from outside for business activities. However, since their purpose is not solely to make a profit (although this may undoubtedly occur based on the results of their business activities), they cannot be classified as business entities. This has important practical implications when deciding whether an association of enterprises can be declared bankrupt.

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