Corporate Approvals Before Selling a Ukrainian Agribusiness

An owner may have agreed a price with a buyer, and the director may be ready to sign. Before signing, however, the parties need to establish who is selling, what is being sold and which body has authority to approve each transaction. A member’s sale of an equity interest and an asset sale by the company raise different approval questions. The director’s entry in the Unified State Register (USR) does not replace a review of the charter and internal resolutions.

The practical starting point is a transaction map: identify each legal entity, agreement, signatory and approval. Reconcile the current charter, up-to-date USR data, the latest approved financial statements, participant resolutions and the final contract. Ask whether a transaction is “significant” for the company acting as a party, rather than assuming that every “sale of an agribusiness” is one.

AGRIBUSINESS · CONFIDENTIAL

Prepare the transaction before going to market

Start with the region, asset scale and proposed sale structure. Company identity, personal data and documents are not required at the first stage.

How the sale process works

Identify the seller and the subject of each agreement

In an equity sale, the participant sells its interest in the LLC. The company itself continues to hold its assets and remain party to its obligations after the ownership change. The seller must review the rules for transferring the interest, the participant structure, applicable restrictions and the documents for that transaction. A statutory threshold for a company’s significant transaction should not be applied automatically to a participant’s own sale of its interest.

In an asset transaction, the company may sell machinery, real estate, inventory or other assets, obtain financing, or grant security. It is then necessary to review the company’s governance, the signatory’s authority and the approval rules for each agreement. A mixed deal requires an agreement-by-agreement analysis. For transaction structure, see our guide to a share deal or asset deal.

If the equity seller is itself a legal entity, review its own corporate approval requirements separately. The target company not selling its assets does not mean that the seller needs no internal approval.

Corporate approval map

Corporate approval map: question, check, evidence and risk
Question	Check	Evidence for the deal file	Risk if missed
Charter	Current version, governance bodies, authority limits and additional approval criteria	Current authenticated copy; relevant amendment history	Wrong body or wrong procedure approves the deal
USR	Company status, participants, director, other signatories and registered representation limits	Current official extract or equivalent registry evidence	Parties rely on stale information
Director and signatories	Who can act without a power of attorney; whether joint action or internal consent is required	Charter, appointment decision, USR and signing matrix	A person signs outside their authority
General meeting	Competence, notice, voting and recorded outcome	Notices, minutes or resolution and voting evidence	Approval is procedurally defective
Significant transaction	Subject and value, statutory and charter criteria, net-assets base	Calculation, latest approved financials and competent-body resolution	Required consent is missed
Interested-party transaction	Whether a legally defined relationship exists and what the charter requires	Conflict review, charter and any required resolution	A conflict or approval route is overlooked
Powers of attorney	Scope, term, validity and fit with the final contract	Instrument and current-status check	Representative acts beyond the mandate
Corporate agreement, if any	Relevant voting, sale or control-transfer commitments	Agreement and analysis of its application	Participant commitments disrupt closing
Current resolutions	Fit of party, subject, price mechanism, signatory and conditions with the final contract	Resolution-to-contract comparison	Approval covers a different deal version

This is a working review map, not a universal list of mandatory documents. Our seller document guide covers the wider transaction file.

Director authority: reconcile the register and the charter

Under Ukraine’s LLC law, the executive body manages current operations. A sole executive body or the head of a collegial executive body can act for the company without a power of attorney; the charter may provide a different arrangement, including joint action by certain executives. The USR records the director, other persons who may act for the company and information about restrictions on representation. An extract is therefore a starting point, not a complete approval opinion. [1, 2]

Compare the people recorded in the USR, the authority granted by the current charter and any approval required from another corporate body for the proposed action. Then check that every agreement names the correct signatory. If an agent signs, review the power of attorney. If the director changes during negotiations, refresh the evidence before signing.

When is a significant-transaction approval required?

Article 44 of the LLC law allows the law or a company’s charter to set a special consent procedure by reference to the value of a transaction’s subject or other criteria. Under Article 44(2), where the value of the property, works or services forming the subject of a transaction exceeds 50% of the company’s net assets under its latest approved financial statements, consent is decided exclusively by the general meeting of participants, unless the charter provides otherwise. The charter also needs to be checked for other significant-transaction criteria and approval rules. [1]

This is not a blanket test that “any sale worth more than half the business” needs the same approval. Identify the contracting entity, the subject and value of the agreement, the current charter and the correct accounting base. Revenue, EBITDA, an indicative company valuation and an arbitrary management number are not substitutes for net assets under the relevant approved accounts. Article 44 also addresses splitting what could have been one significant transaction into multiple agreements: each may itself be treated as significant. [1] Check the company’s approved financial records and the accounting framework. [4]

What should a participant resolution cover?

The resolution must come from the competent body and follow the procedure applicable to that company. Before signing, verify notice and voting, the defined transaction, the counterparty, the commercial terms within the scope of consent, the authorized signatory, and any price or timing limits. The key practical test is whether the resolution covers the actual final contract and related closing actions.

If the terms change after approval, do not assume an earlier resolution is broad enough. Compare the new terms with its scope and obtain fresh approval where the company’s advisers determine it is needed. Where debt, collateral or litigation is involved, prepare a separate liability and consent map; see our related guide.

Interested-party transactions and later ratification

Article 45 defines transactions involving an interested party and allows a company’s charter to set the relevant consent procedure. A relationship between the parties alone does not settle the process: identify the persons involved, read the charter and examine the specific transaction. [1]

Article 46 provides a mechanism for later ratification of a significant or interested-party transaction carried out without the required consent procedure. It is not a planned substitute for review before signing, nor does it guarantee that every contractual defect disappears. If an approval issue emerges after signature, obtain transaction-specific legal advice on the competent body, procedure and remaining risks before taking the next step. [1]

A pre-market and pre-signing checklist

Map the equity owner, the company, the asset owner, borrower, security provider and seller under each agreement.
Obtain the current charter, up-to-date USR evidence and ownership structure; flag changes during negotiations.
Gather executive appointment decisions, relevant minutes and powers of attorney.
Locate the latest approved financial statements and a documented calculation for the significant-transaction test.
Review potential interested parties, any corporate agreement and extra charter restrictions.
Build a signing matrix: approving body, voters, signatory and evidence for each action.
Compare resolutions with the final agreements, schedules and closing conditions immediately before signing.

Run this review early in the agribusiness sale process, before broad disclosure to buyers. An unresolved approval should not first appear at closing.

Common mistakes

Relying only on the director’s name in the USR without reading the charter.
Treating a participant’s equity sale and the company’s asset sale as the same transaction.
Using revenue, EBITDA or unapproved accounts as the statutory net-assets base.
Splitting connected agreements without considering Article 44.
Treating later ratification as a routine fix for any missing approval.
Approving one version of the deal and signing another without a fresh comparison.

Frequently asked questions

Can the director sign an agribusiness sale alone?

It depends on the seller and the subject of the transaction. A participant sells its own equity interest. For a company agreement, review the charter, USR, director authority and any required consent from a competent corporate body. Being recorded as director does not prove that every approval exists.

How does an equity sale differ from an asset sale by the company?

In an equity sale, the owner of the interest changes while the company keeps its assets and obligations. In an asset sale, the company transfers defined property or rights. The signatories, approvals and documentation can therefore differ.

When is a transaction “significant”?

When it meets criteria in the law or charter applicable to a company transaction. Article 44 includes a rule for a subject worth more than 50% of net assets under the latest approved financial statements, unless the charter provides otherwise. The charter may add other criteria.

Which financial statements support that threshold?

For Article 44(2), the company’s latest approved financial statements. Verify their approval and the net-assets calculation rather than using an informal business valuation.

Is the USR entry for the director sufficient?

No. The register identifies the director, other authorized persons and recorded representation limits. Internal competence and approval requirements still need to be reconciled with the charter and corporate resolutions.

What if the charter imposes additional limits?

Determine which agreements they cover, the competent approving body and the form of consent. Record the evidence before signing, and re-check it if terms change.

Can a transaction be ratified after signing?

Article 46 provides a later-ratification mechanism for the cases it covers. Its application and procedure need a transaction-specific review; it does not guarantee that all other risks disappear.

What if an interested party is involved?

Identify the relationship, review Article 45 and the current charter, and determine the applicable approval route. A generic “related party” label is not enough to establish the procedure.

Which corporate records should be shown before and after an NDA?

At first contact, a high-level ownership outline and proposed approval route may suffice without personal or confidential details. After buyer qualification and confidentiality arrangements, provide relevant charter, registry, resolution and authority evidence through a controlled data room. The exact scope depends on the deal.