Zoia Zamikhovska, Junior associate with Legal Alliance Company
Special for EBA Experts Talk
While the ideological struggle is going on for the streets deprivation of their communist image, at the same time we continue observing absolutely ordinary processes like everyday operations of the companies and enterprises. Mainly, due to the streets’ renaming such companies and enterprises face real problems related to the adjustment of statutory documents, obtained licenses and information included into public registers. The right or obligation to update the information – is the main question to be covered in this article.
Change of Location as a Matter of Law
At the legislation level there is a list of information on each legal entity. Such information is obligatorily included into the unified data system Unified State Register of Legal Entities and Individual Entrepreneurs (hereinafter – “Unified Register”). This system accumulates the information being reliable for the third parties and which may be created for granting access to state authorities. In accordance with paragraph 10 part 2 article 9 of the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations” (hereinafter – “the Law on State Registration”) such information includes the location of companies and enterprises. Therewith, the Law on State Registration clearly states that it is necessary to register the updated information on the location of legal entity in case it is changed (part 4 article 17).
Moreover, the indication of the company’s location is required when applying for the license. However, the change of the mentioned data, according to part 15 article 13 of the Law of Ukraine “On Licensing of Certain Types of Economic Activities”, does not form the basis for license reissuance.
Nevertheless, the question is should we consider the street renaming as the change of location, as the legal entity did not actually change its physical location.
Opportunism in State Policy
The state authorities have not yet elaborated a unified position regarding the abovementioned issue. The State Fiscal Service, without going much into detail, deems the streets’ renaming as the change of location. Consequently, according to the Service such changes require obligatory state registration. Moreover, due to the streets’ renaming the State Fiscal Service points out the necessity of getting the new authorization documents, in particular licenses.
The clarification of Kyiv City State Administration generally indicates the consequences of streets’ renaming for the validity of title deeds for real property. Thus, the representatives of municipal authorities consider this issue to be at the discretion of such documents’ owners and recommend acting according to each specific situation. In particular, they point out that the legislation does not provide for the amendment of the documents of entitlement (title deeds, certificates of inheritance, purchase and sale agreements, barter contracts, gift contracts, etc.) due to the renaming of streets where the real estate units are located. Therefore, such documents are considered to be valid and do not require replacement or obtainment of new document. However, in case of title transfer (gif, sale) it is recommended to bring the address in consistency with decommunized reality.
On the contrary to the position of the State Fiscal Service, the State Regulatory Service of Ukraine in its clarification letter dated 2015 holds the position that the renaming is not synonymous with the change of location. The basis for such conclusion is article 93 of the Civil Code of Ukraine, which states that the location of legal entity is the actual place of business or office location wherefrom the daily management of legal entity’s operations (where the head office is located), control and accounting are carried out. Therefore, as reasonably noted by the State Regulatory Service of Ukraine, the changing of zip code or streets name does not lead to the change of actual location of operations management or office location wherefrom the control of legal entity’s daily activities is carried out. Consequently, there is no need in obtaining the authorization documents with the new address or registering and including the respective changes into the state registers.
When appealing directly to the law in pursuance of which the streets are being renamed (the Law of Ukraine “On Condemnation of the Communist and National Socialist (Nazi) Regimes and Prohibition of Propaganda of Their Symbols”), we may find a certain key to the understanding of the issue, in particular in paragraph 8 of the Law’s Final and Transitional Clauses, which provide for amending the Law “On State Registration”. Particularly, this relates to part 2 article 10 of the Law “On State Registration”, which states that the administrative fees are not charged for the following:
- Conduct of the state registration of changes introduced to legal entities’ statutory documents related to the adoption of the Law of Ukraine “On Condemnation of the Communist and National Socialist (Nazi) Regimes and Prohibition of Propaganda of Their Symbols”;
- Changes of the legal entities’ locations due to the change of name (renaming) of squares, boulevards, streets, lanes, driveways, avenues, circuses, bridges, and other objects of urban toponymy.
In other words, the legislator inclines us to think about the necessity of the company’s information adjustment upon the renaming of the street where the company locates. However, the unexpected fact is that such provision was recognized in the previous version of the Law of Ukraine “On State Registration”, and the current version active since 01.01.2016 does not contain this provision.
Disillusionment of the Right of Choice
Making the decision on the decommunization of the streets’ names, the legislator allowed for the idea of necessary adjustment of the legal entity’s information included into the state registers and statutory documents. In other words, this laid the grounds for the understanding of the streets’ renaming as the change in the location of the company. Consequently, despite the absence of direct law provision, it is recommended to secure your future and to introduce changes to statutory documents, state registers and title deeds in accordance with the updated address. The good news is that the law does not provide directly for the adjustment terms and liabilities for their infringement. Therefore, the farewell to the past may be quite painless.
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