Author: Viktoriia Staryk, lawyer at F&P
In today’s Ukrainian business environment, especially after the abolition of the Commercial Code of Ukraine in 2025, a corporate agreement is becoming not only a tool for large corporations, but also a necessity for small and medium-sized enterprises. This document allows to clearly define the rights and obligations of the participants, decision-making and conflict resolution mechanisms, which is especially important in the context of legal uncertainty and economic instability.
What is a corporate agreement?
A corporate agreement is a written agreement between the company’s shareholders that sets out the procedure for exercising their rights and obligations within the framework of corporate relations. It may be paid or gratuitous and is concluded to resolve internal issues that are not always detailed in the company’s charter. In particular, a corporate agreement may establish:
- Voting procedure at the general meeting of participants.
- Terms of transfer of shares in the authorized capital.
- Mechanisms for resolving conflict situations.
- Responsibilities for financing the activities of the company.(Higher School of Advocacy of the Ukrainian National Bar Association)
It is important to note that the corporate agreement must not contradict the company’s charter and the current legislation of Ukraine.
Legislative changes in 2025: new challenges and opportunities
In 2025, Ukraine underwent significant changes in corporate legislation. In particular, the Commercial Code of Ukraine was abolished, which led to the need for businesses to adapt to the new regulatory environment. Instead, the Law of Ukraine “On Peculiarities of Regulation of Business Activities of Certain Types of Legal Entities and Their Associations in the Transition Period” came into force.( aktiv-alb.com, Verkhovna Rada of Ukraine)
This law provides for amendments to the Civil Code of Ukraine, in particular, regarding the possibility of legal entities to exist in the organizational and legal form of “association of legal entities”. Such changes are aimed at improving corporate governance and increasing the country’s investment attractiveness.( Advisor in the field of public procurement)
Why should a company with a minimum number of shareholders enter into a corporate agreement?
The question often arises: is a corporate agreement necessary in companies with only two or three members? The answer is unequivocally yes. Even in such companies, situations may arise that require clear regulation:
- Withdrawal of a shareholder from the company. A corporate agreement may provide for the procedure for redemption of shares and settlements between participants.
- Distribution of profits. The agreement allows for individual terms of profit distribution other than pro rata distribution of shares.
- Strategic decision-making. You can determine which decisions are made unanimously and which are made by a majority vote.
- Protection against unfair practices. The agreement may contain provisions on liability for breach of obligations and dispute resolution mechanisms.
Thus, a corporate agreement is a kind of “insurance” for the company’s shareholders, ensuring predictability and stability in their relationships.
Tips for concluding a corporate agreement
- Involvement of professionals. The drafting of a corporate agreement should be entrusted to experienced lawyers who will take into account all the nuances of the law and the specifics of the company’s activities.
- Individual approach. There is no universal template for a corporate agreement. Each agreement should take into account the specifics of a particular company and its members.
- Regular review. Changes in legislation or company structure may require amendments to the corporate agreement. It is recommended that you periodically review the agreement and make any necessary adjustments.
Conclusion
The conclusion of a corporate agreement is an important step for any company, regardless of the number of shareholders. This document helps to avoid many potential conflicts, ensures transparency in relationships and contributes to the stable development of the business. In the context of constant changes in legislation and the economic situation, a clear and well-thought-out corporate agreement is the key to the company’s successful operation.
