Two friends, 60/40, and a director who vanished
Two friends started a business and split the shares 60/40. The one with 40% became director. They bought cars and equipment for the company and got to work. Some time later the director simply disappeared: not answering the phone, the access gone with him.
The partner with 60% could do almost nothing. You can't just replace a director, you can't dispose of the assets, the cars sit idle. All because at the start they didn't agree on what to do in that situation. The model articles don't provide for it.
What I prepare
- Articles for your company: shares, quorum, who makes decisions and how.
- The director's powers and the limits on deals they can sign alone.
- The procedure for a member's exit and for valuing the share.
- Shareholder agreement: deadlock, non-compete, right to buy out a share, an investor coming in.
- Meeting resolutions and registration of the new version of the articles.
Articles or shareholder agreement
The articles are public; anyone can see them in the register. A shareholder agreement is confidential and binds the members. The articles hold the rules for the company; the agreement holds what partners don't want to tell the world.
| Articles | Shareholder agreement | |
|---|---|---|
| Who sees it | Anyone, it's in the register | Only the parties to the agreement |
| What it governs | Bodies, shares, decisions, exit | How members vote and act in specific situations |
| How to change it | General meeting resolution and registration | By agreement of the parties |
| When you need it | Always | When there are two or more members, or an investor |
A verbal investor is nobody
Someone invests $20,000 in a startup and is considered a partner on a handshake. A year later they're pushed out of the project. How much will they get back under the law? Most often zero. The money was transferred to the founder “for development”, and for the law that's an ordinary transfer.
How it should be: either the investor is added as a member with a share, or a shareholder or investment agreement is signed. How much they put in, what they get, what happens if someone wants them out. And all of it before the money is transferred. More in the article investors and partners without a contract.
What's worth writing down
What to do when the votes split down the middle. Who can sell a share and to whom. Whether a partner may open a competing business. What happens to a share if a member dies or divorces. How the share is valued on exit. Whether the director gets a salary.
Not every company needs all of this. We pick what could really happen to you.
How it works
Your part: an honest conversation about money and roles. The rest of the arrows are mine.
Law of Ukraine “On Limited and Additional Liability Companies”: Art. 7 (shareholder agreement), articles on the charter, general meetings, member exit and share transfers; Civil Code of Ukraine (general provisions on contracts).
Frequently asked questions about articles and shareholder agreements
What's wrong with the model articles?
They're the same for everyone. They have no rules for a conflict, a member leaving or an investor coming in, and the director automatically becomes an employee.
Does a shareholder agreement need to be notarised?
The law requires written form. Notarisation isn't mandatory, but for some terms I advise having the signatures certified.
Can we sign a shareholder agreement if the company is already operating?
Yes, at any time. Preferably before disputes start.
How much does it cost?
From €150. The exact price depends on the number of members and how complex the arrangements are.
Can a shareholder agreement include an option for an employee?
It can provide for a right to a share under certain conditions. We choose the structure for the specific situation.
Can the tax office or the bank see the shareholder agreement?
Its content is confidential unless the law requires otherwise. Unlike the articles, it isn't filed with the register.
Planning to buy or sell a share? See buying and selling a share. And if a partner has already gone rogue, we'll make the changes through registration changes.