How to Increase and Replenish the Authorized Capital of an LLC?

Managing a company in a foreign country is always a complex task for international entrepreneurs, especially when dealing with the specifics of local legislation and business practices. One of the critical aspects of running a business in Ukraine is the process of forming and managing the authorized capital of a Limited Liability Company (LLC).

This topic is particularly important, as Ukraine has clear requirements and procedures for creating, increasing, and replenishing the authorized capital. These must be taken into account when starting or operating a business. If you are a foreign entrepreneur looking to understand how to navigate this essential process correctly, we have prepared a step-by-step guide for you.

Minimum Authorized Capital of an LLC in Ukraine

One of the most frequently asked questions among foreign entrepreneurs is: what is the minimum authorized capital required for an LLC in Ukraine? Ukrainian legislation does not specify a minimum or maximum amount for the authorized capital of an LLC, allowing you to choose any sum to start with—even as little as one hryvnia.

However, it is important to note that the authorized capital must be formed within six months of the company’s registration. While in practice, authorities do not always strictly enforce this timeframe, especially when the company has a single founder, and violations of this deadline rarely lead to serious consequences, it is still essential to consider and comply with this requirement.

Related article: How to buy a ready-made business in Ukraine? Checking a ready-made company in Ukraine

How to Increase the Authorized Capital of an LLC?

Increasing the authorized capital in Ukraine requires following specific procedures. This process consists of several key steps:

1. Holding a General Meeting of Members. The first step is to convene a meeting of the LLC's members to adopt a resolution on increasing the authorized capital. At this meeting, the timeline for making additional contributions is determined.

2. Second Meeting to Approve Contribution Results. After all members have made their contributions, a second meeting is required to confirm the results of the capital increase. The minutes of this meeting must be notarized and submitted to the registrar.

3. Registering Changes in the Unified State Register. Once the capital increase has been approved, changes must be made in the Unified State Register to officially reflect the new authorized capital amount.

It is essential to note that the registrar does not verify whether funds or other assets have actually been transferred to the company’s balance. This is a formal procedure that concludes with updating the amount in the state records.

How to Replenish the Authorized Capital of an LLC in Ukraine

Replenishing the authorized capital is a distinct process governed by specific regulations. For contributions up to 400,000 UAH, the procedure is relatively simple: the company participants can transfer the amount to the company’s account, specifying the payment purpose as "replenishment of authorized capital." This is a standard practice for Ukrainian founders.

However, if the replenishment amount exceeds 400,000 UAH, the procedure requires undergoing a bank verification to confirm the origin of the funds. This applies not only to cash contributions but also to other forms of capital replenishment exceeding this threshold.

If the LLC participants are foreign nationals, replenishing the capital in an amount over 400,000 UAH necessitates the submission of additional documents verifying the legality of the income source. These documents may include:

• For individuals: Proof of income, such as salary certificates or tax declarations.

• For legal entities: Bank statements and financial reports for the last 6 months or year.

• For foreign companies: Documents confirming information about ultimate beneficiaries.

It is important to note that banks may request confirmation of the funds’ origin even for amounts below 400,000 UAH if there are any suspicions regarding their source.

How Can Our Law Firm Assist Your Business?

Increasing and replenishing authorized capital is a key milestone in business growth. For foreign entrepreneurs conducting business in Ukraine, this process may seem complex and accompanied by numerous bureaucratic hurdles. However, it can become significantly easier with the right legal support.

With extensive experience collaborating with international business owners, we provide professional support at every stage of this process. Regardless of the complexity of your situation, our team ensures efficiency and convenience in addressing the critical needs of your business.