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1. Redistribution of Statutory Capital and Change of Ownership Structure
The procedure of redistribution of statutory capital and change of ownership structure cannot be applied to private enterprises, citizens’ associations, municipal and state enterprises due to the unitary nature of these enterprises (unified owner). For these enterprises, change of ownership structure means change of type of ownership and/or change of organizational and legal form. Such processes are not covered with the notion of “redistribution of statutory capital and change of ownership structure”. Therefore they are defined as reorganization of the enterprise.
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2. Increase of Statutory Capital at the Expense of Holders’ Funds
Increase of the statutory capital at the expense of holders of joint-stock companies is made by way of purchase of shares and compensation of their value in the course of their issuance, and for limited liability companies – by way of payment for acquisition of corporate rights distributed in favor of the participant by decision of the supreme body of the LLC.
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3. Conversion of Claim Right into Shares
The legislation of Ukraine does not contain the notion of conversion of claim right into shares (share in the statutory fund) of enterprise. This notion is more economic by composition and implies possibility of repayment of accounts payable of an economic entity in connection with repayment of counter accounts receivable of the potential shareholder (participant) of this economic entity. There are various legislative mechanisms for this transaction:
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4. Enterprise Buy-Out
The concept of enterprise “buy-out” is ambiguous. In general terms, it means acquisition of rights with regard to the enterprise, allowing the holder maximum control over the enterprise.
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Source: Goverment of Ukraine/ World Bank EDAL Bankruptcy and Liquidation Project Debt Restructuring Training Manual
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