KYIV, Ukraine –The Law of Ukraine "On Amendments to the Law of Ukraine "On Joint Stock Companies" regarding Improvement of the Mechanisms of Joint Stock Companies' Activities" No. 2994-VI dated 3 February 2011 (the "Law") has been officially published on 2 March 2011.

The Law comes into force as of the date it has been published (i.e. from 2 March 2011), save for the provisions revoking the joint stock company's preemptive right to purchase its own shares, which shall become effective from 1 January 2012.

The Law has substantially changed operating and corporate governance procedures of joint stock companies and these novations are as follows.

It has been established that legal entities may be elected as supervisory board members of a joint stock company; previously, only individuals could serve as supervisory board members. Also, individual supervisory board members are prohibited to delegate their authorities to other persons. Quorum of a supervisory board meeting now constitutes "more than half of its members", previously it was "not less than half".

The Law has changed the definition of controlling stake now it is "more than 50%" instead of previously established "50% or more".

The obligatory listing of public joint stock company's shares on a stock exchange has been abolished; however, the requirement has been established to include them into register of at least one stock exchange. This procedure is substantially simpler than listing.

The decision-making procedure with respect to concluding of significant transactions, i.e. amounting to 50% or more of the value of a company's assets has been changed; now such decisions may be adopted by a majority constituting more than 50% of the total number of shareholders' votes; previously, such decisions required 3/4 of the total number of shareholders' votes.

Overall we positively evaluate the introduced changes and we believe that they will help to improve effectiveness of management of joint stock companies. It should be noted, however, that some of the introduced changes restrict rights of minority shareholders.

ABOUT DLA Piper Ukraine LLC
DLA Piper Ukraine LLC is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. A list of offices and regulatory information can be found at www.dlapiper.com. Kyiv switchboard: +380 44 490 9575

The matters covered in this newsletter are intended as a general overview. This newsletter is not intended, and should not be used, as a substitute for taking legal advice in any specific situation. DLA Piper Ukraine LLC will accept no responsibility for any actions taken or not taken on the basis of this newsletter. If you would like further advice, please contact Corporate Team at +380 44 490 9575.

INFORMATION: Galyna Zagorodniuk, Senior Associate, T +380 44 490 9561, E Galyna.Zagorodniuk@dlapiper.com; Maryna Bychkova, Associate, T +380 44 490 9575, E Maryna.Bychkova@dlapiper.com.

NOTE:  DLA Piper is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.