VIOLATION OF THE TERMS OF THE CORPORATE AGREEMENT: CONSEQUENCES AND WAYS TO PROTECT THE RIGHTS OF PARTICIPANTS

Abstract

The article delves into recent developments in Ukrainian legislation, with a particular emphasis on the concept of the «corporate agreement» as a mechanism for regulating corporate rights. It thoroughly examines the structural components of a corporate agreement, their interactions, and distinctive features. Additionally, the study provides a classification of corporate agreements. The analysis highlights the conditions necessary to establish comprehensive legal regulations for corporate agreements within Ukrainian corporate law. It underscores their significance as effective instruments for managing corporate relationships and fostering productive collaboration among participants within corporations. Furthermore, the authors assert that corporate agreements represent a critical embodiment of dispositivity in Ukrainian corporate law. Comparisons are drawn to company charters, illustrating the advantages offered by corporate agreements. The scope of a corporate agreement encompasses the execution of rights and obligations related to the management of legal entities. This may involve alterations in governance powers or address non-governance matters, such as distributing profits (dividends) or stipulating restrictions on profit distribution. Participants in a corporate agreement are typically shareholders holding stakes in the authorized capital of a corporate entity. Corporations themselves or other parties relevant to corporate relations may also be involved. The article addresses both theoretical and practical facets of safeguarding the rights of corporate agreement participants, stressing the importance of harmonizing and aligning Ukrainian legislation with European standards. Among the recommendations made is the incorporation of mechanisms that impose liability for improper performance or non-compliance with corporate agreement terms, particularly through compensation measures. The effectiveness of compensation as a tool for protecting participant rights is highlighted, emphasizing its role in ensuring proper adherence to obligations. It is deemed one of the most optimal solutions compared to other methods available under current legal provisions.