Registering TOV in Ukraine

A limited liability company (TOV) is one of the most common forms of business organization. According to the State Statistics Service, there are currently over 804,000 such companies registered in Ukraine. The following article will provide insight into the advantages of a TOV over other forms and the process of registering one in Ukraine in 2025.

What is TOV?

A TOV is a business entity with an authorized capital divided into shares among all its members. It can be established by one or more individuals, with no upper limit on the number of participants. Each contributes a share to the authorized capital, which is recorded in the company’s constituent documents. The financial responsibility of the participants is distributed in the same proportion.

When registering a business, an entrepreneur must select a form: a TOV, a joint-stock company, or an individual entrepreneur (IE). A TOV is the optimal choice for small businesses or those seeking to expand or attract investments. It should be noted that tax legislation restricts the types of business activities that can be conducted through an individual entrepreneur, including those related to travel and insurance.

Which is better – IE or TOV?

When selecting between TOV and IE, an entrepreneur must consider a number of factors, including the business area, volume, risk level, and scalability potential, among others.

IE is an appropriate choice for small and medium-sized businesses. The registration process is simple. IE does not require authorized capital, and the cost of registration is significantly lower than the amount required for a TOV. Consequently, this form is available to a wide range of entrepreneurs. At the same time, IE has fewer opportunities for business growth. In the event of bankruptcy, the owners are liable for the company’s debts with their personal assets, which introduces an additional risk for the business.

TOV is an optimal solution for large enterprises. This form of business provides a flexible management structure, allowing participants to sell or donate their participation interests to another Investor. At the same time, business processes in dealing with contractors, employees, and suppliers remain unchanged, thereby reducing risks and allowing for effective business management.

However, registering a TOV is more complicated. The same is true for business management, including accounting and tax reporting.

TOV registration: step-by-step instructions

An entrepreneur can register a TOV independently or use the services of a law company. The following steps are required:

Step 1. Choose a company name

Requirements for company names are outlined in the Commercial Code of Ukraine, the Civil Code of Ukraine, and other laws. Specifically, a company name must be unique and must not duplicate the name of another company that is registered in the Unified State Register. The name may contain Ukrainian and Latin letters, Arabic and Roman numerals, as well as punctuation marks and special characters.

The name of a TOV must not contain the following:

• full or abbreviated names of Ukrainian state bodies and their derivatives;
• historical state names;
• symbols of communist or national socialist (Nazi) regimes;
• terms and abbreviations prohibited by applicable law.

Step 2. Choose the KVED (classifier of types of economic activities) codes

The number of KVED codes for a TOV is unlimited, but the entrepreneur must specify the main one. If an entrepreneur does not conduct business under any of these codes, there will be no consequences. However, it is important to note that activities related to unlisted KVEDs may be subject to tax audits.

Certain KVEDs require a license. These include the provision of financial and educational services, the production and trade of medicines, and activities in the field of electricity, etc.

Step 3. Register a legal address

The most common way is to buy or rent office space and register the TOV at this address. Additionally, the founder may provide their home address during the registration process.

The TOV legal address is necessary for communication with business partners and government agencies. During the registration process, state authorities do not verify the TOV legal address. However, providing an inaccurate address could potentially lead to complications with government agencies in the future. For instance, discrepancies between the registered and actual addresses of the TOV may result in penalties for non-admission during an audit by tax authorities.

You may also specify your email and phone number. This information demonstrates your reliability and integrity to potential partners.

Step 4. Determine the charter capital

A company needs a charter capital in case its operations are interrupted and it has financial obligations to partners or the state.

The law does not specify a minimum amount of the charter capital. The founders of a TOV may contribute any amount of money, as well as property or securities that have undergone an independent monetary valuation.

The size of each TOV founder’s participation interest determines his or her ability to influence management decisions. It is advisable to avoid instances where two founders contribute 50% of the charter capital each, since in the event of a disagreement, each founder may impede the company’s operations.

Step 5. Organize a meeting of the founders and approve the charter

The founders will discuss the key issues of the TOV’s activities during the meeting and include them in the charter. The charter can be prepared using a standard template and finalized according to the company’s specific requirements. The charter typically includes the following sections:

• General provisions: company name, legal address, subject matter of the TOV’s activities.
• Legal status and basis of activity: list of founders, general operating principles.
• Charter capital and participation interests of participants: amount of the charter capital, number and size of participation interests, rights and obligations of participants.
• Management bodies and the resolution of company issues: structure and functions of management bodies (general meeting of participants, management board, etc.), decision-making procedure.
• Distribution of profits and losses.
• The procedure for withdrawal of participants from the TOV.
• The procedure for transferring participation interests in the charter capital of the TOV.
• The audit and financial control.
• The procedure for amending the charter.
• Company liquidation: conditions and procedure of TOV liquidation, distribution of property, settlement of liabilities.

Depending on the specifics of the business and the needs of the TOV, this list may be supplemented by other sections or addenda.

Following the meeting, a protocol is drafted. The protocol is to be distributed to the founders, the TOV, and the registration authority, with each party receiving one copy.

Step 6. Submit an application for the registration of a legal entity.

The application form for registering a legal entity is available on the Ministry of Justice of Ukraine’s website. The entrepreneur is responsible for completing the form on a computer or by hand. Pages that do not contain any data do not need to be printed and submitted. The application requires the signature of one of the TOV founders, a director, or a lawyer.

TOV registration services are available through executive bodies of village, town, and city councils, notaries, and other state registrars. The entrepreneur must submit an application at the place of residence. The registration period is 3 to 7 days.

Step 7. Choose the taxation system for a TOV

Once a TOV is registered, it is subject to the general taxation system by default. Along with the registration application, an entrepreneur may submit an application to switch to the simplified taxation system of TOV and register voluntarily as a value-added tax payer.

Step 8. Open a bank account for a legal entity

For a TOV, an entrepreneur can open a hryvnia or multi-currency account. In many banking institutions, this process can be completed online. However, the specific terms and conditions of this procedure may vary between different banks. The specific details can be found on the respective bank’s website.

Step 9. Obtain a QES

To submit electronic reports to government agencies, a legal entity must obtain a qualified electronic signature. This can be obtained from qualified electronic trust service providers (KNEDPs). The complete list of qualified electronic trust service providers is available on the Ministry of Digital Transformation’s website.

Each provider determines the procedure for obtaining a QES separately. For instance, the Vchasno.KEP electronic signature can be obtained remotely via the internet, without the need for visits to the company’s office. The electronic signature certificate is valid for one or two years.

How to register a TOV in the Diia service

Beginning in 2022, TOV registration through Diia became available in Ukraine. To register a TOV, please follow these steps:

• Log in to the Diia portal and select the service “Registration of a TOV based on a model charter.”
• Fill out the online form and select the required version of the registration document.
• Choose the taxation system: general taxation with VAT registration or simplified taxation.

The system automatically generates and submits for registration an application, minutes of the meeting of founders, and a document on the ownership structure. The status of the application is displayed in your personal account on the Diia portal. In the event of a successful registration or refusal, the entrepreneur will receive a notification in their account and via email.

Existing legal entities can open a new TOV through Diia. The documents required for registration must be signed by the head of the legal entity. This procedure is carried out with the participation of a state registrar and can take up to one day.

The system automatically transfers information about the registered TOV to the tax service. An entrepreneur can receive a tax registration certificate within three days from the date of registration. This document can be downloaded from the “Received documents” section of the Diia personal account.

How to liquidate a TOV

Liquidating a TOV is a more complicated and time-consuming process than registering one. The company may terminate its activities for the following reasons:

• by the decision of the founders;
• upon expiration of the license;
• upon termination of the company’s activities;
• by a court decision.

The procedure for liquidating a TOV is outlined in the Law of Ukraine “On Limited Liability and Additional Liability Companies.” This process involves the following steps.

1. The founders hold a meeting to decide to terminate the company’s operations.
2. All employees are to be dismissed in accordance with the Labor Code, and they are to be paid their salaries and severance pay.
3. Attorneys will prepare and submit a package of documents to the relevant authorities, including financial statements for the most recent period of the company’s operations, tax records, and accounting ledgers.
4. Then, they submit an application to the fiscal service for an audit.
5. If feasible, they settle all outstanding debt obligations and taxes, and close bank accounts.
6. If the TOV is a founder of other open TOVs or has branches, the liquidation commission should be notified.
7. The company is responsible for returning seals, licenses, and other permits to the relevant state authorities.
8. All long-term storage documentation should be transferred to the archive. Following this, a record of the company’s liquidation will be entered in the Unified State Register of Legal Entities. Consequently, the TOV will be considered closed.