Legal Hotline | Digest of the main legislative changes in Ukraine 28.10.2021

Better late than never: the well-known principle of unity of a land plot and real estate has been finally enshrined in law

The Law of Ukraine “On Amendments to Certain Enactments of Ukraine concerning the Common Legal Fate of a Land Plot and Immovable Property Located thereon” entered into force on October 28, 2021.

Hereafter, the procedure of simultaneous transfer of rights to a land plot in connection with the transfer of rights to an real estate located thereon is legally enshrined.

The principle of unity of a land plot and real estate located thereon had already existed before the novelties. However, in practice there have arisen numerous challenges.

From now on, the law clearly provides that:

• in case of purchasing a share in the joint ownership right to real estate privately owned by its previous owner, the title to a land plot on which such real estate is located shall be simultaneously transfered to the purchaser in proportion to his/her share in the right of joint ownership to such property, unless the previous owner owned a share of another proportion;
• if a land plot on which real estate is located is under the lease, used by the previous owner on the emphyteusis, superficies right, the leasehold, emphyteusis, superficies right to the land plot, respectively, shall be transfered to the purchaser within the scope and on the conditions established for the previous owner;
• if such an immovable property is located on the land plot used by the previous owner under the lease, emphyteusis, superficies right, the purchaser shall have the right to demand respective modification of the contract with determination of his/her co-tenants (co-users).

A company is not a participant in itself: case-law of the Supreme Court

This conclusion was reached by the Commercial Cassation Court within the Supreme Court in the resolution in case No. 904/1112/20.

The case concerned recognition of the resolutions of the general meeting as unlawful resolutions as, according to the plaintiff, such meetings were held without a quorum since 13% of the votes in respect of the participatory interest in the authorized capital held by the additional liability company had not been taken into account.

The Court stated the following as to the consequences of the acquisition by the company of a participatory interest in its own authorized capital (repurchase of a participatory interest from another participant):

• the company may acquire participatory interests of participants without reducing its authorized capital only if it simultaneously establishes a reserve fund
• in this case, such a participatory interest shall be alienated by the company within one year
• otherwise acquisition of the participant’s interest always creates an obligation of the company to reduce the authorized capital

When refusing to grant the claim, the Court concluded as follows:

• it is not allowed to equate the participatory interest of a participant in the company’s authorized capital with the participatory interest held by the company in this company
• participatory interest held by the company does not provide it with any corporate rights
• the company shall not participate in the management and have other powers in respect of itself
• such a participatory interest is held by the company temporarily (for one year)

If the company itself acquires a participatory interest (of a part thereof) of a participant without reduction of the company’s authorized capital, it is obliged to alienate such a participatory interest within one year after the date of acquisition of the participatory interest (or a part thereof).

Thus, failure by the company to alienate its participatory interest shall not change its legal status and shall not authorise the company to participate in voting at the extraordinary general meeting and in determining the number of votes at such a meeting.

What reports may be submitted electronically in 2021—2022: State Statistics Service of Ukraine updated the list of forms

On October 18, the State Statistics Service of Ukraine posted on its website an updated list of forms of state statistical observations and financial statements, which may be submitted by respondents electronically in 2021—2022.

Please note that the list of forms will be expanded as they are implemented electronically.

Biomethane in Ukraine: establishment of a register and confirmation of origin

On October 21, the Verkhovna Rada adopted the draft law “On Amendments to the Law of Ukraine “On Alternative Fuels” on the Development of Biomethane Production”.

The Law establishes the definition of “biomethane” as “biogas”, which, due to its physical and technical features, meets the requirementss of the regulations on natural gas for supply to gas distribution and gas pipe lines or for the use as motor fuel.

Adoption of the Law primarily provides for:  

• the option to verify purified biogas (biomethane), the physical and technical features of which meet the requirements of regulations on natural gas
• the provision of guarantees of origin for a certain amount of biomethane supplied to the gas pipe line system and export of the produced biomethane through the use of the biomethane register
• the creation of a biomethane register for accounting in the system and establishing the procedure for generating guarantees of origin of biomethane

Please note that using the capabilities of the Ukrainian natural gas pipe line system in order to export biomethane to the EU market will improve the economic attractiveness of biomethane production in Ukraine.