Practical Aspects Of Managing Corporate Rights Before Accepting Inheritance In A Single-Member LLC

Abstract

Theoretical and practical issues regarding inheritance management and acquiring and realizing corporate rights by inheritance are widely researched and discussed in the paper. At the same time practical aspects of managing corporate rights before acquiring and realizing corporate right by inheritance in a single-member LLC require in-depth scientific analysis, since legal norms raise many questions when applied.

The article reveals the practical aspects of obtaining a certificate which certifies the authority of the executor of the will (namely corporate rights, i.e. corporate executor), as well as issues related with exercising powers of the corporate executor. It has been stressed that neither the Civil Code of Ukraine nor the law of Ukraine “On limited liability companies” contain clearly defined guidelines on managing corporate rights before accepting inheritance. In practice a question arises as to which decisions the corporate executor is authorized to make so that they could be viewed through the prism of “any necessary actions aimed at preserving an inheritance” pursuant to part 2 of the article 1285 of the Civil Code of Ukraine.

The article points out that the law of Ukraine “On state registration of legal entities, individual entrepreneurs and non-governmental organizations” does not envisage the entry of necessary data about the corporate executor in the National State Registry of Ukrainian Enterprises and Organizations. Therefore the data regarding the corporate executor cannot be found in the National State Registry of Ukrainian Enterprises and Organizations. The data about the deceased member of the LLC remains in the National State Registry of Ukrainian Enterprises and Organizations until after based on the certificate of inheritance the heirs file an application for joining the LLC and introducing necessary changes.

The necessity to envisage a legal norm under which the required information about the corporate executor shall be entered in the National State Registry of Ukrainian Enterprises and Organizations, as well as the need to clearly define the powers of the corporate executor until inheritance is accepted have been substantiated. The aforementioned actions must be taken by the legislature for both protecting the rights and interests of the heirs and for proper functioning of the LLC.