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Types of tax audits and their characteristics



Tax audits are the main means of control by the State Tax Service. And if we take into account the Ukrainian realities, this is one of the least pleasant elements of the relationship between the business and the authorities.

The main types of tax audits

There are three types of tax audits: cameral, documentary, and factual. Also, inspections can be planned or unplanned, indoor, or off-premise.

The cameral inspections are carried out in the space belonging to State Tax Service only on the basis of the data contained in the tax returns. Such a verification does not require a special resolution or a mandatory presence of the taxpayer.

During the documentary inspection, control is carried out based on the analysis of tax declarations, accounting and financial statements, source documents, etc. During the documentary inspection the supervisory authority is faced with the task: to check the promptness and completeness of the calculation of all taxes and fees, the compliance with foreign exchange legislation, formalization of labour relations with employees.

The scheduled inspection can only take place on the basis of a schedule of inspections. This inspection can be carried out only after prior notification of the taxpayer.

Certain legal grounds are necessary for an unscheduled inspection to take place. The reasons include: the failure to submit a tax return within the time limit established by law, Facts about possible violations during the conduction of inspections of other tax payers, the data that was found to be unreliable in the declarations.

A decision and prior notification of the taxpayer is required for off-premise tax audits, but the taxpayer’s presence at the inspection is not required.

Whether the probability of verification can be reduced

Yes, it is possible. This requires (if appropriate and possible):

  • Avoiding the submission of negative tax returns. This applies to both income tax and VAT (in the latter case, the critical is “minus” more than 100 thousand. UAH). It all depends on the ratio of “economic benefits/ verification risk”. A useful life hack can be given here: with small amounts of VAT refund or income tax it is better to make a positive declaration, even knowingly making a mistake (no one is fined). Then, with the filing of the next declaration, the error can be corrected in the current declaration (for profit tax, for example, there is an amended returns application) or by filing a reckoning calculation. This method works and allows you not to show the “minus”;
  • Not to conduct transactions with dubious counterparties (liquidation, bankruptcy, offshore, change of location, etc.). You can check your counterparties for reliability Check the counterparty with «Expertus: Holovbuh»
  • Avoid excessive transactions with single taxpayers and reducing the payment of ERUs and other wage taxes. Care should be taken to ensure that single taxpayers who are managers or other employees of the enterprise do not receive more than 5% of the total supply of the enterprise, and ERUs do not decrease by more than 20% per year. These figures are taken from the internal recommendations of the State Tax Service;
  • Submit tax returns on time;
  • Respond in a timely manner to written requests from the State Tax Service, if any. On time is 15 working days from the day of receipt of the request (p. 78.1.1 of the Ukrainian Tax Code);
  • Register tax receipts in time so that there are no complaints from buyers;
  • Use the registrars of settlement operations (RRO) if required, and issue fiscal checks to avoid complaints from buyers (valid from October 1, 2020);
  • Avoid appeals to the Additional verification is possible, for example, when objecting to the tax inspection act.
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Appealing individual tax advice

What to do to check:

  1. Checking the execution of documents for 1095 days from the date of submission of tax reports, in which they were included.
  2. Trying to guess what will be checked and why (hint: inspection schedule, past requests from the State Tax Service, negative declarations). It is possible to make a phone call.
  3. Paying attention to the signatures (both own and counterparties) – they can recognize the transaction as fictitious.

What to do during and after inspection

  • Not to provide documents that are not requested;
  • Refuse to provide documents that are not related to the subject of the inspection;
  • Do not leave inspectors with originals one-on-one and prevent them from taking them – originals are not allowed to be withdrawn;
  • Check availability according to the regulation, if asked to carry out an inventory.

Preparation for tax audit: practical recommendations

All tax audits can be divided into three groups.

The first group – scheduled tax audits. Business must be officially notified of such inspections in accordance with the procedure established by the Tax Code of Ukraine.

The second group – unscheduled inspections. Business can only guess at the timing of these inspections. Letters from the tax office that asking for information may be a signal that verification is to be expected, some of them may state that there are reasons to carry out unscheduled documentary checks.

The third group – sudden tax inspections, which are carried out without warning of the taxpayer.

Recommendation

Use the open data on the website of the State Tax Service of Ukraine to get information about the planned tax audits. Analyze the received requests of the tax on the demand of information and its documentary confirmation for the possibility of initiating unscheduled inspections in the future. This will allow you to buy time to thoroughly prepare for the verification.

So, the main condition for a successful ending of any tax inspection – planning and systematizing the preparation for it. And with our specialists doing this is even easier.

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How can I sell or buy an existing business?


There are three ways to sell or acquire a business:

  • Full sale by the owner – in this case, all ownership of the business is transferred.
  • Sale of corporate rights – in this case, the business is transferred in a simplified mode: a way to change the composition of owners and the structure of their shares or to change the owner of a legal entity.
  • Donation – the business is donated.

More than 90% of transactions are made using the first and second methods. In order for the transaction to be carried out without problems, a large team of lawyers, tax assistants, tax consultants, accountants and business assistants is needed.

Is there a difference between the procedures of selling and buying a business?

Buying and selling a business is quite different. Each procedure has to pass a certain stage in its own way. The buyer (investor) has certain algorithms of preparation for the transaction, and at the seller (owner) has other. The goal of the buyer is to reduce the risks and problems of the purchase, while the goal of the seller is to sell the business or his share in it for as much as possible.

Legal support for business acquisition

Organizing a business from the very beginning can be quite troublesome. It is necessary to prepare in advance for various difficulties, financial problems, and the bureaucratic red tape. But all this can be avoided if you buy an established business.

However, there are also some problems. We do not recommend making such a purchase by yourself, as this process is very difficult and responsible. You will need the help of a special lawyer, who can support the organization of the business acquisition transaction, and it is almost impossible to do it without him!

Legal support for business acquisition, what is included?

  1. Complex audit of the financial activity of the company, as well as risk assessment, including checking whether there are debts and other burdens: liabilities, corporate and labor relations (due diligence), etc.;
  2. Preparation of recommendations on investment conditions, development of financial and legal algorithm of investments;
  3. Development of a business plan for growth of the business;
  4. Legal execution of the transaction and its maintenance (transaction with shares or stocks, agreement to provide the option, corporate agreement, corporate procedures);
  5. Negotiation;

It is worth noting that S&P Agency is a reliable partner and has been successfully defending clients’ interests in investment projects for many years.

Professional approach and high standards of legal services provide our clients not only profitable and risk-free investments, but also a clear understanding of the prospects for the development of a new business direction.

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What does the legal support for business sales include?

  1. Audit of the accounts of the seller, its assets, and liabilities

The accountant primarily conducts the audit of accounting documents, assets and liabilities, and inventories.

  1. Analysis of all the stages of purchasing real estate

In practice of S&P Agency lawyers it is reassuring that many real estate transactions can be challenged even three years after the sale. There are many reasons for reinstatement of missed sentences in court. Therefore, the lawyer studies the history of properties (on the internet and registered GPA), analyzes the title documents.

  1. Expert assessment of major contracts

Legal support of the purchase of a business is only successful when meticulous examination of contracts and other documents is conducted. Thanks to it, it is possible to find serious forfeits and fines stipulated by contractual obligations. Contracts may, however, specify genuinely unrealistic terms for the acquired legal entity. Therefore, testing for potential and real risks is a critical step.

  1. Reconciliation of ownership stocks and shares

The lawyer requests and checks all documents: constituent, minutes of the General Meeting of Shareholders and the Board of Directors, other management bodies. If corporate papers are misstated, there are risks that shareholders or former shareholders will challenge them.

  1. Verification of debts and other liabilities

There is a very high probability of the existence of debt to fiscal, utility and service authorities. Therefore, the business acquisition algorithm must include a check of tax debts to the State Penitentiary Service of Ukraine. It is also necessary to check whether the share of business in the pledge to the bank or other commercial organization: the presence of liabilities and risks on them is also worth checking by the lawyer.

How to Close a Deal Without Risk

Thus, many tasks require careful and professional attention. The S&P Agency Company offers legal support for business sale and purchase.

The final stage of the transaction for both parties will be a change of ownership and CEO, which we will conduct in one day. Consult with us today at

+38 (044) 383-00-00 or email us at office@sp.agency. We’re always in touch!

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Tax incentives for large investors

Tax incentives for large investors


Large investors – large tax benefits

The subjects of investment activity of the country have support at the legislative level. It provides, in particular, a rather wide range of tax benefits. Thus, if investors execute the terms stipulated by the laws, they may be spared from the income tax partially or even completely, as well as exempted from the property tax. 

However, such preferences for investors are contained in a rather wide set of laws and subordinate acts, and often represent an unwieldly base of complex regulations and conditions. 

Will tax discounts help to activate investments in Ukraine? 

Despite the unfavorable investment situation, the authorities are trying to stimulate the inflow of investments into Ukraine by all means. At one time, the Verkhovna Rada supported two draft laws – No. 3761 and No. 3762 – according to which amendments were envisaged in the Tax and Customs Codes. Legal acts aimed to facilitate the implementation of the Law of Ukraine “on state support of investment projects with significant investments in Ukraine”, which received a very comical formulation in the business and financial circles – “the Law on Investment-nannies”. 

Lure for investments 

According to the law, state support, among other things, may be granted to potential investors as tax privileges. These include, for example, exemption from payment of certain taxes and fees, as well as customs duties for the import of new equipment; the predominant right to use land, which is either communal or state property; infrastructure support for the invested project at the expense of the state (system of communications, roads). This means, in fact, that the exemption from VAT and duty during the delivery of new equipment to the country, as well as the five-year exemption from the payment of income tax. At the same time, the share of support from the state accounts for no more than 30% of the total amount of investments in the project. 

In addition, local governments have the right to determine lower rates of land tax and rent for land of communal or state property or, at their own discretion, to exempt investors from such payments. 

However, according to the law, when providing the project, the investor is obliged to observe certain conditions: 

  1. the amount of investments should not be less than €20 million; 
  2. investment spheres: art, culture, sport, education, science, healthcare, tourism; as well as the following sectors: transportation and logistics, circulation and utilization of domestic waste, processing industry (except tobacco and alcohol), extraction and enrichment of minerals (except coal, oil and gas); 
  3. the investor creates no less than 80 jobs. An important condition is that the average wage at the new enterprise should exceed the average in the region by at least 15%; 
  4. the term of the realization of an investment project is no more than five years. 

It is noteworthy that in comparison with other equally important economic acts, the law “on state support of investment projects with significant investments in Ukraine” was adopted relatively quickly. It passed the first reading on July 21, 2020, and on December 1 it was sent for the repeated second reading and was accepted in two weeks, on December 17. On February 10, 2021, it was signed by the President. 

And the next day after the publication the law came into force. Changes in the tax and customs codes came into effect on January 1, this year and will be effective until January 1, 2035. 

In the course of work on the bill between the first and second reading the financial sector of investments was reduced – from €30 million to €20 million; the minimum number of jobs is reduced from 150 to 80. The document also restated the sectors and areas where benefits can be obtained when investing in them. According to The Ukrainian League of Industrialists and Entrepreneurs (ULIE) this was a wish of the business environment. 

The ore and benefits 

In the first draft law, the extraction of certain useful minerals was not mentioned. At the moment of the second reading, enrichment of minerals and mining has appeared in the list of industries that were promised state support – except oil, gas and coal. Thus, it is the priority of the state to develop the iron ore field. 

Article 3 of section VII “Final and Transitional provisions” states explicitly that investments aimed at the enrichment of iron ore may have certain benefits, in particular: 

  • priority right of land use, which includes the advantage of land acquisition to the ownership or lease of land plot of communal or state property; 
  • exemption from duty when new equipment is imported into the country; 
  • exemption from payment of a number of taxes and fees. 
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At some point, two iron ore projects were implemented in Ukraine: The GOK of the Canadian company Black Iron and the Belanovo GOK of Ferrexpo.

Black Iron planned to launch the construction of a new iron ore production in Kryvyi Rih by the end of 2021, so it was positively adopted the law. Thus, due to the reduction of advance taxes and duties for the construction of the processing enterprise, as well as the reduction of initial tax payments in the company, the economy was valued at almost $170 million 

Problems of implementation 

At first, the problematic part of the draft law was the lack of a full financial and economic substantiation. The implementation of the law can significantly affect the revenues to the state budget because it is not known how much income from such investment projects will be reduced due to the absence of taxes and duties, as well as import duties. 

Moreover, the law does not correspond to agreements of Ukraine with the International Monetary Fund on non-formation of new tax privileges (as the Head of Legal Department of the Verkhovna Rada warns in his analysis). 

However, the experts have found many weak spots in the draft law (from the point of view of legal law) even during the working process. Although, it should be taken into account that this document is more of a political rather than a legal move, therefore, the legal moments were ignored during its voting process.

In order for the law to work, on March 2, 2021, the Verkhovna Rada adopted two interrelated laws – No. 3761 and No. 3762. They have defined amendments to the tax and customs codes. A new necessity has emerged: The Ministry of Economy needed to agree and adopt normative acts in just half a year to “launch” the law. 

Therefore, if we take into account the slow realization of any large-scale industrial projects, it was not worth waiting for any investment breakthrough last year. Although the adoption of a law that defines the state support of investments, nevertheless has a certain effect on the launch of new projects. 

A hard look

On one hand, this law is of a considerable importance for the intensification of investment income to Ukraine. After all, the larger the industrial project, the more difficult it is to realize. In addition, there are often many difficulties faced by foreign investors who do not have experience in Ukraine or a “local” partner, in particular, there are obstacles related to bureaucracy. This nullifies the efficiency of the project or in fact makes it impossible. 

On the other hand, the Index of Investment attractiveness of Ukraine has decreased to 2,4 points (its level in 2013) from the maximum of five, which is confirmed by the survey of the European Business Association (EBA). For example, about 66% of entrepreneurs surveyed stressed the deteriorating investment climate compared to the first half of 2020. 29% said that business conditions have not changed. Only 5% believed that the investment climate has improved. 

Foreign investors, amongst whom the EBA has conducted a survey, have pointed to the following main obstacles for investment: 

  1. an unpredictable judicial system; 
  2. corruption;
  3. monopolization of markets and influence of oligarchs; 
  4. unstable and complicated legislation as a fact; 
  5.  repressive attitude of law-enforcement and control bodies. 

It should also be noted that the economic benefits granted by the state to someone, the society already treats as a standard (which, in fact, created no conflicts in many years of practice). It is means the formation of new corruption schemes and opportunities to provide for business close to the government to “legally” avoid taxation due to privileges. 

What will be the most important factor in the investor’s decision – unfavorable investment climate or tax benefits? This issue is still open to question. But one can say for sure: a single law cannot reform the economic and legal system and create a positive environment in Ukraine for foreign investments.

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5 of the most important recommendations for reducing risk

5 of the most important recommendations for reducing risk


  1. Choice of the name of a legal entity. 

Often the project begins with the choice of a name for the firm. For example, registering a legal entity, with the names of well-known brands such as Pepsi Cola, Konica-Minolta or Bugatti, is not the most advantageous start for a potential successful business. This is common knowledge, and one does not need to be familiar with intellectual law to understands that such an action will not remain without conflict. It is recommended to conduct a research on the competitors in the market and outside of it to ensure that there are no similarities of such kind to avoid court disputes.

  1. Risks associated with the seizure of means of individualization. 

With the development of the company, it is possible, and even necessary, to register the trademark itself – for own goods, services or generally the company. Quite often, bold entrepreneurs, or “players” try to create problems for their competitors, who are also noticeable players in the same market area: registering trademarks similar to what was already used by a competitor, and later prohibiting the business from using them. 

  1. Improper registration of rights on created content. 

It is necessary to treat the registration of rights on the results of intellectual activity with due caution. Unfortunately, in the absolute majority of cases, because of the unwillingness to deal with paperwork “fuss” this procedure is disregarded. As a result, often a situation occurs where the end service or product (for example, the website and its design) includes some elements that belong to the intellectual property rights of other persons. On top of that, the contracts on granting or alienation of the right are frequently not properly concluded. 

A similar situation is already a considerable risk and threat to the realization of the project. The fact is that a former employee of the firm, who is also the owner of exclusive rights to any important elements of design, or a freelancer, if you wish, can create many problems for the company – up to a full ban on the use of the elements created by the individual (including co-authoring). 

Therefore, if the client cannot prove that the rights to the created intellectual products have been legally transferred (alienated) to him, then such a freelancer or an employee has a quite won case. In this case, the best way out of the situation is to conclude an agreement with such a seeker for easy profit. However, it is most likely that the conditions will be extremely unfavorable for the company. 

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  1. Illegal use of other’s outputs from intellectual activity.

There are often situations where different subjects use foreign works (results of intellectual property) without the permission of the right-holder and without the permissible free use. 

Probably, it is connected to a certain common legal nihilism and a myth – “everything placed in the world wide web can be used without punishment, and there will be no consequences”. Such a tendency is evident within relatively well-established and authoritative companies. 

Without doubt, such beliefs arise from lack of knowledge and overconfidence. Illegal use of the product of intellectual activity belonging to other persons in any case will lead to serious problems, in particular, large financial charges and deterioration of the company’s reputation. Such examples are quite common in court practice on intellectual activity cases. 

And if it comes to that, the judicial and legal conflict with the legal owner will not positively contribute to the formation of a successful business. 

  1. Absence of a user agreement at the right time. 

The user’s agreement must be present if your site requires user-generated content (UGC). 

There are many cases when the Internet portal has been functioning for a long time and effectively and has been turned into an Internet platform with quality of content and involvement of users. However, it turned out that neither site administrators nor owners have received any consent from users to use this content. 

The use of foreign works (products of intellectual activity, etc.) without the permission of the owner provides a significant risk, connected with possible negative consequences. With accordance to the rules, every case of use of works should receive the consent of the owner of the product of the intellectual activity (rights-holder). 

As a result, implementation of the basic recommendations on compliance above and their adherence requires time and finance, which for many enterprises, especially small, is not a priority or is not planned. However, it is compliance-control that serves as a vital component of business success, which is based on the company’s information, commercial and financial security, business reputation and trust from contractors and clients. 

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What is antitrust compliance?

What is antitrust compliance?


In the Ukrainian business environment, antitrust compliance is a quite new phenomenon. And if the corporate compliance for banking institutions and joint-stock companies is already mandatory, the issue of the need for legislative implementation of internal antitrust codes is yet to be discussed. 

Ukraine is working hard to create its own legislative base in this area, trying to adapt it not only to the legal system of the European Union, but also to world trends in various sectors of the economy. However, taking into account that the legal systems of many leading countries of the world have long contained references to the antitrust compliance, such attempts of Ukraine are rather strange (as it is possible to use trusted foreign experience). Moreover, today in Ukraine there are very few professionals for whom the antitrust compliance is a mandatory component of business activity. 

What is the essence of antitrust compliance? It is a system that serves the internal securement of conformity of the subject’s activity with the requirements of the antimonopoly legislation. Thus, the main functions of antitrust compliance are: identification and management of potential risks of the violations of the law; algorithm implementation control aimed at the elimination of such risks; analysis of the overall system performance. 

The antitrust compliance, as well as any other system of control at the enterprise is effective only if the management of the enterprise is interested in its work, interested in the transparency of information, continuity, and consistency of system operations. This is something similar to accounting principles. However, the business in Ukraine is not yet aware of the serious consequences of antitrust risks and does not see the need to create an internal system to prevent such risks. In the future, of course, the situation will certainly change. 

Firstly, the penalty sanctions for the violation of the legislation on protection of economic competition are quite large and can be up to 10% of the company’s revenues (or profits) for the last reporting year, in which the penalty is imposed. Thus, the actively the Antimonopoly Committee of Ukraine acts, the faster the business will understand that antitrust compliance should be established in the near future. However, using solely the punishment method is not rational for achieving the main goal: the formation of antitrust compliance only at the level of business culture. Secondly, proceeding from the above, there is going to be a start of a long process of obtaining the relevant knowledge and skills, stimulation and efforts to implement compliance at a practical level for business in Ukraine. Perhaps, significant results in this direction will appear in about five or six years. In this regard, it should be noted that the awareness of the need to implement antitrust compliance, which is an important step in conformity with the legislation, should be instilled into the future experts while they are still at the university. 

Development and implementation of antitrust compliance at a particular enterprise has its consistent algorithms of work. In addition, there are great long-term examples of the implementation of compliance in many of the world’s leading countries, as mentioned above. The results of this practice were the basis for the creation of a practical guide on the Antitrust Compliance Toolkit developed by the International Chamber of Commerce (ICC). The antitrust compliance tool was introduced in 2013 at the fifth round table of the ICC on the Competition Policy (Warsaw), which took place in April. It is important to note that this manual was formed by specialists who implemented internal compliance techniques not only for large, but also for medium and small businesses. 

What is important from the practice of these specialists in case of launch of the antitrust program? First of all, it is to realize the existence of antitrust risks. Also, to create internal codes of ethics that help employees understand that adherence with internal standards should not be based on the fear of punishment, and should be based on self-conviction, that it is necessary to do so, not otherwise. However, for this purpose it is necessary to ensure active participation of the management of the enterprise: Undoubtedly, the bright example superior behavior in this regard will significantly correct the psychology of the team in a positive direction. 

The second important step – appoint employees from the highest management of the enterprise responsible for adherence with the compliance program. If the enterprise is large, it is possible to involve several specialized professionals in this work. This work includes, among other things, setting up a reporting algorithm both before the management of the enterprise and before the end beneficiaries. It is also important to provide the necessary funding for the implementation of the antitrust compliance program. 

The third important step – develop antitrust risk identifying algorithms and methods for evaluating the effectiveness of the identification. In this area the important factors are: systematic training of the company’s personnel and formation of stimulation methods, which will guarantee the attraction of employees in the process of compliance-program execution. 

In the last step it is necessary to launch control measures, which should include: internal antitrust inspections at a complex level; periodic investigations; disciplinary procedures. 

Based on the above-stated principle, compliance programs are standing out as efficient and promote fair competition, reduce the risks of antitrust requirements violations. Most importantly, they will help employees and management of enterprises to conform with the legislation without the hassle of their personal initiative. 

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However, business should start working on the formation of the antitrust compliance at the enterprise should be now, rather than waiting for the inspection of the Antimonopoly Committee of Ukraine, since it is physically impossible to promptly eliminate existing violations and prevent new ones in such a short period of time. Note that the formation and effective launch of the compliance will require real work and should not have a purely formal, on-paper character. There is no doubt that in just a few years Ukraine will join the circle of countries in which the compliance program is an integral part of business culture. 

4 Compliance-Agreements. Top-5 legal recommendations on risk reduction 

A lot of Ukrainian companies have started using a tool that is named compliance. Compliance is in fact a set of measures by which lawyers prevent various violations of the law and internal procedures. What is it and what are its pros? This will be expanded on below. 

The value of compliance

The success of a business depends on countless conditions and factors – the price and quality of the product (service), marketing, competition in a certain market, innovation of the enterprise and the product (service), market needs, etcetera. 

However, as the modern society shifts towards rational consumerism more and more ordinary consumers do not pay as much attention to the price and quality of the product, and in turn consider the impact on the small and large communities by enterprises, look into the ecological activity of the enterprise-producer (service provider), and overall value the positive image of the company, which produced the necessary goods.

Thus, when choosing a contractor for business activity, the overwhelming majority of enterprises checks the legality of the conduct of a potential contractor of business. A business may also check for the absence of legal disputes, which reflects not only the authenticity of the counterparty’s activities, but also the counterparty’s failure to comply with its contractual obligations.; absence of tax debts; absence of scandalous situations in social networks or mass media. 

Therefore, compliance is extremely important for the success and profitability of the enterprise, as each of the above aspects is a potential risk factor the owners and the management: and both are interested in preventing the negative consequences for the company mentioned above, which is done by such a set of measures.

Building compliance in a company

For the majority of business owners, it has become an obvious necessity to build a compliance-system within companies.

Objectives of the compliance-system: 

– to fight corruption and fraud; 

– to identify risks that have resulted from non-compliance with internal and external norms; 

– to comply with the requirements of international standards and Ukrainian legislative norms. 

It is always necessary to start with the logging of the company’s policies. 

There is a number of standard policies that are applied to some extent in most organizations : 

-Corporate Code of Ethics. It is a standard document applicable to almost all aspects of the company’s operations. The document contains moral and ethical principles of its activity, norms of employee behavior and their duties. 

– Anti-Corruption Policy. It provides certain procedures and practical actions for both employees and clients, as well as contractors. 

– Policy on Gifts and Invitations. In Ukraine, such a policy is quite pertinent, as it has been widely practiced for a long time in the social system with regulatory and supervisory authorities, partners and counterparties. 

– Policy on Reporting Ethical Violations. Effective execution of this function is one of the most efficient ways to combat various violations within the company. 

– Conflict of Interest Policy. This document outlines ethical norms and standards of employee behavior in the event of a conflict of interest, namely, when the employee’s interests and actions contradict the interests of the company. 

– Policy of Interacting with Regulatory Bodies. Proper and productive interaction with regulatory bodies is an extremely acute issue, as even in law-abiding companies, various difficulties may arise during collaboration with state services. 

– Privacy Policy. 

It is important to outline that any company can additionally conduct necessary processes on the basis of principles approved by the management, and in such a way create its original structure of compliance control.

Politicians explained: now we need to recognize the risks. Certainty, it is optimal for the company to draw up a risk map for short-, medium- and long-term periods. However, one may ask a question: why do businessmen need it?. The answer is that with the help of such maps, companies understand what to pay special attention to, what to fear less and what does not matter in a particular economic sector. The risk map is not just a common list of potential problems or risks for the company (for analysis and control purposes), but also a tool for effective implementation of a strategy. 

Unfortunately, not everyone that uses a compliance-system knows how to build it effectively.

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The bankruptcy of legal entities: cost


Bankruptcy is called the inability of a company to conduct business because of a lack of funds, through which there is a problem with the inability to settle the debt of the company.

A set of laws and several regulatory and legal acts of Ukraine defines and strictly controls the procedure of bankruptcy of legal entities. Refraining such an order is mandatory for all parties to the proceedings.

The bankruptcy of the enterprise is aimed not only at liquidation of the business, but also at financial rehabilitation of the enterprise. The latter implies a full financial renewal of the company and further development in the future.

Only highly qualified specialists will help you in difficult tasks, as bankruptcy for a particular type of enterprise. The bankruptcy procedure is carried out according to all legal requirements.

The bankruptcy procedure is possible for such types of enterprises:

  • for businesses with high debt to partners;
  • for creditors who have the objective of recovering their debt from an insolvent enterprise.

For a legal entity, bankruptcy has some pros and cons. The recognition of the insolvency of an enterprise results in a number of advantages: 

  • there is a chance to preserve the property of the enterprise from alienation;
  • no opportunity for the seizure of assets or funds;
  • the company develops for itself a productive plan to return to solvency and fulfillment of obligations to creditors;
  • business is protected from having means of withdrawal, which are not taken into account by law;
  • the company/enterprise will be able to resume operations as a legal entity;
  • it is possible under the law to write off the debt, including, if the enterprise has lack of money to repay it;
  • if there is evidence of innocence, the owners and managers of the enterprise can avoid administrative and criminal liability.

Among the disadvantages of the bankruptcy procedure for a legal entity:

  • the bankruptcy process is quite long, sometimes this process can take a couple of years;
  • the bankrupt enterprise is obliged to pay all costs related to the court;
  • in the bankruptcy of an individual enterprise, the disadvantages of bankruptcy can be attributed to the fact that from the moment of recognition of insolvency, the company and its management will be given increased attention;
  • all licenses that the entrepreneur has previously received will be revoked, and their retrieval will be a rather difficult process;
  • due to the revocation of licenses, the IP will no longer be able to carry out the activities it has previously introduced.

In which cases bankruptcy lawyer’s services are required

  • the bankruptcy process is very difficult and requires specialized knowledge, as it contains legal norms;
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  • In more than 15 years of work in the market of Ukraine, our lawyers gained enormous experience, that allows to carry out the procedure with high-quality and speed;
  • a professional team of lawyers will be able to help to mitigate all issues, minimize the risk and conduct the procedure according to the law.

Features of juridical support of the bankruptcy process of the enterprise

The collaboration starts with an interim assessment of the situation, an analysis of the volume of work and its actual achievements. Our specialists conduct an analysis on:

  • Accounting department. The data is taken for the last three years of the operations of the enterprise. The obtained data forms conclusions about the causes of bankruptcy – intentional, fictitious or real;
  • The prospects of the lender. The task for specialists – to find creditors who will be inclined to peaceful settlement;
  • The options of legal methods to avoid liability from the customer;
  • The potential informativeness of previously lost documentation;
  • Disclosure of information about the debtor. Having full information will add a greater percentage of success.

At the end of the stage above, experts provide a report with the most advantageous strategy. It lists future risks and options for overcoming them, provides a preliminary cost and time frame for the procedure.

Cost of procedure through bankruptcy proceedings

The cost depends on many criteria:

  • the region where the enterprise is located;
  • company’s turnover;
  • the number of employees in state;
  • features of accounting;
  • many other factors.

The price of the package of services includes:

  • risk assessment for the enterprise;
  • correspondent services
  • complex support of business bankruptcy and a specially developed proposal: audit of interim liquidation balance, audit report.Guarantees from S&P Agency:
  • Agency professionalism. We have successfully completed many bankruptcies of enterprises;
  • The whole process is carried out strictly within the limits of the law;
  • Confidentiality;
  • Going through the bankruptcy procedure in the available short terms;
  • We are reliable partners for your business. We have special permits and knowledge.

Before you start bankruptcy proceedings, you should do everything possible to pay off debts. A default declaration is permissible only if there are no other possible steps.

Legal support the S&P Agency provides on the bankruptcy of an enterprise is the key to success in the development of a new stage of your business.

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Name: Mykola

Surname: Siutkin

Email: siutkin@sp.agency

Phone: +380443830000

Company address: 10 Redutnaya Street, Kyiv, Ukraine


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