Practical Aspects of the Establishment of a Business

Practical Aspects of the Establishment of a Business

The procedure of the state registration of subjects of entrepreneurial activity in Ukraine is regulated by laws of Ukraine "On Entrepreneurship", "On Economic Partnerships," Provisions On the State Registration of Subjects of Entrepreneurial Activity" approved by the Cabinet of Ministers' Resolution # 125 of 25 January 1996 and the Cabinet of Ministers Resolution # 406 of 3 April 1996 "On Fees for the State Registration of Subjects of Entrepreneurial Activity."

The principal stages of the process of registration may be presented in the following order:

Conducting a Meeting of founders and preparation of the Statutes of the Enterprise, Foundation Agreement, and Minutes of the Meeting of Founders.
Getting notarial certification of the founders' signatures put on the Statutes and the Foundation Agreement.
Paying of the state registration fee in a division of the OschadBank.
Opening of an interim account and payment of the contributions to the authorized fund of the entity of entrepreneurial activity by the owners of the enterprise in the amount, provided for by appropriate legal acts.
Filing of the required documents to the appropriate district division of the state administration for the state registration of the entity of entrepreneurial activity in accordance with the list approved by legislation.
Receiving within 5 working days in the district state administration of the approved documents about the state registration of the entity of entrepreneurial activity.
Getting registered in the city/town department of statistics and receiving an identification code of an entity of entrepreneurial activity in the Single State Register of Enterprises and Organizations.
Getting registered in a district tax administration.
Closing of the interim account with the bank and opening of a permanent (settlement) account.
Getting an authorization from a division of the authorization system of the district department of home affairs for the fabrication of a seal and imprints.
Manufacturing of the seal and imprints.

Costs, associated with the creation and registration of small-sized businesses, may be divided into two components:

recurring costs (procurement of equipment, lease of premises, hiring of manpower, etc.) that are conditioned by the contractual kind of enterprise's activity, location of the business;
constant costs that are connected with the fulfillment of mandatory procedures related to the registration process: paying of a portion of the authorized fund, preparation and notarial attestation of founders' documents, fee for the state registration, payment to the bodies of statistics, state anti-fire inspection, sanitary inspection, etc.

Information about recurring costs related to fees for the state registration of entities of entrepreneurial activity is shown in the Table.

The average costs of the fulfillment of several stages of the state registration of an entity of entrepreneurial activity are as follows:

notarial attestation of documents - 20.70 UAH.;
payment for the identification code - 15.25 UAH.;
payment for the opening of an account with a bank - 90.180 UAH. (in certain banks this is free of charge);
payment for the authorization to manufacturing of a seal and imprints - 20 UAH.;
payment for the manufacturing of a seal, imprints - 14.20 UAH.

Table 9.1.Amount of Fees for the State Registration of Entities of Entrepreneurial Activity

Amount of fees ( in the number of non-taxable minimums of citizens' incomes to be paid for the state registration) payable by:

Entrepreneurial activity businessmen without the creation of a legal entity partnerships with limited, accessory, full responsibility, retail cooperative societies joint-stock companies, associations of enterprises enterprises with alien foreign investment other legal entities

Industry and construction 1.5 4 8 8 4

Agro-industrial complex 1.5 4 8 8 4

Science and scientific services 1.5 4 4 4 4

Rendering of services:

everyday services 1.5 4 8 8 4

legal services 1.5 4 8 8 4

travel services 1.5 5 8 8 4

intermediary services 2.5 6 10 10 5

Financial-investment activity 2.5 8 10 10 5

Health care 1.5 4 8 8 4

Education and culture 1.0 2 4 4 2

Other spheres 1.5 4 8 8 4

Practical Aspects of Business Organization

Kinds of Entrepreneurial Activity Liable to Licensing

Prospecting (exploring) and exploitation of deposits of economic minerals Manufacture, maintenance, and marketing of sporting, shooting, fire arms and ammunition as well as cold arms, pneumatic guns with a caliber of 4.5 mm or more and the speed of bullet in excess of 100 m/sec; establishment and running of shooting galleries, rifle ranges, trap and skeet shooting ranges

Manufacturing and marketing of medicines Manufacturing and marketing of especially dangerous chemicals, the list of which is determined by the Cabinet of Ministers of Ukraine

Manufacturing of tobacco goods Manufacturing of beer, alcoholic beverages, as well as manufacturing and marketing of ethyl, cognac, and fruit alcohol

Legal practice Medical, veterinary practice

International transportation of passengers and freights by railroad, automobile (excluding CIS member states), air, and sea transport Setting up and running gambling houses, organization of gambling

Manufacture and import of blanks for securities, strictly accounted documents and signs of mail postage as well as half-finished materials for manufacturing thereof Agency service for trade fleet ships

Activity related to use of radioactive wastage, sources of ionizing radiation, transportation of nuclear materials and radioactive agents; designing, construction and exploitation of objects related to nuclear power manufacturing as well as maintenance thereof
Services related to guarding of state-owned and other property as well as body-guarding

Implementation of chemical aviation works and aerial photography Extraction of precious metals and precious stones and marketing of goods manufactured with use thereof

Insurance activity Auditor's activity

Remittance of money, transmission of letters (up to twenty grams), and postcards Manufacturing of veterinary medicines and preparations

Topographic and geodesic works and land surveying Use of radio frequencies

Manufacturing and marketing of special means charged with tear-inducing and acrid agents, personal protection, active defense and means for special operations and investigation measures Construction activity (some kinds of designing and construction-assembling works, engineering survey for construction; marketing and other services which require respective attestation of the executor in accordance with the list determined by the Cabinet of Ministers of Ukraine)

Educational services (state-standard diploma) Activities related to development, manufacture, importation, exportation, marketing and use of means for cryptographic and technical protection of information as well as related to rendering services dealing with cryptographic and technical protection of information

Forensic activity Activity related to organization of foreign tourism and voyages abroad

Manufacturing, transmission and delivery of electric power Services and works related to anti-fire protection

Mediation in finding jobs abroad Transactions with scrap metal

Services related to telephone communications (excluding departmental objects), technical maintenance of TV, radio and wire broadcasting in frames of industrial exploitation Maintenance and exploitation of pipelines

Development, testing, and exploitation of space apparatus and parts thereof, surface space infrastructure and parts thereof, equipment constituting the space segment of satellite systems, excluding TV and radio broadcasting systems Scientific research related to creation and use of space machinery and technologies (excluding launch vehicles)

Other space-related services, according to the list approved by the Cabinet of Ministers Transmission, receiving, dissemination of data received from space objects, excluding issues under the jurisdiction of the National Council on Television and Radio Broadcasting

Processing and storage of donor blood and its components, realization thereof and preparations manufactured from them Activity related to turnover of narcotic drugs, precursors, psychotogenic agents, the list of which is determined by the Cabinet of Ministers of Ukraine

Physical training and fitness activity (the list of physical training and fitness activities liable to licensing is determined by the Cabinet of Ministers of Ukraine) Trust and other operations with principal's (depositor's) property

	Amount of fees ( in the number of non-taxable minimums of citizens' incomes to be paid for the state registration) payable by:
Entrepreneurial activity	businessmen without the creation of a legal entity	partnerships with limited, accessory, full responsibility, retail cooperative societies	joint-stock companies, associations of enterprises	enterprises with alien foreign investment	other legal entities
Industry and construction	1.5	4	8	8	4
Agro-industrial complex	1.5	4	8	8	4
Science and scientific services	1.5	4	4	4	4
Rendering of services:
everyday services	1.5	4	8	8	4
legal services	1.5	4	8	8	4
travel services	1.5	5	8	8	4
intermediary services	2.5	6	10	10	5
Financial-investment activity	2.5	8	10	10	5
Health care	1.5	4	8	8	4
Education and culture	1.0	2	4	4	2
Other spheres	1.5	4	8	8	4

Prospecting (exploring) and exploitation of deposits of economic minerals	Manufacture, maintenance, and marketing of sporting, shooting, fire arms and ammunition as well as cold arms, pneumatic guns with a caliber of 4.5 mm or more and the speed of bullet in excess of 100 m/sec; establishment and running of shooting galleries, rifle ranges, trap and skeet shooting ranges
Manufacturing and marketing of medicines	Manufacturing and marketing of especially dangerous chemicals, the list of which is determined by the Cabinet of Ministers of Ukraine
Manufacturing of tobacco goods	Manufacturing of beer, alcoholic beverages, as well as manufacturing and marketing of ethyl, cognac, and fruit alcohol
Legal practice	Medical, veterinary practice
International transportation of passengers and freights by railroad, automobile (excluding CIS member states), air, and sea transport	Setting up and running gambling houses, organization of gambling
Manufacture and import of blanks for securities, strictly accounted documents and signs of mail postage as well as half-finished materials for manufacturing thereof	Agency service for trade fleet ships
Activity related to use of radioactive wastage, sources of ionizing radiation, transportation of nuclear materials and radioactive agents; designing, construction and exploitation of objects related to nuclear power manufacturing as well as maintenance thereof	Services related to guarding of state-owned and other property as well as body-guarding
Implementation of chemical aviation works and aerial photography	Extraction of precious metals and precious stones and marketing of goods manufactured with use thereof
Insurance activity	Auditor's activity
Remittance of money, transmission of letters (up to twenty grams), and postcards	Manufacturing of veterinary medicines and preparations
Topographic and geodesic works and land surveying	Use of radio frequencies
Manufacturing and marketing of special means charged with tear-inducing and acrid agents, personal protection, active defense and means for special operations and investigation measures	Construction activity (some kinds of designing and construction-assembling works, engineering survey for construction; marketing and other services which require respective attestation of the executor in accordance with the list determined by the Cabinet of Ministers of Ukraine)
Educational services (state-standard diploma)	Activities related to development, manufacture, importation, exportation, marketing and use of means for cryptographic and technical protection of information as well as related to rendering services dealing with cryptographic and technical protection of information
Forensic activity	Activity related to organization of foreign tourism and voyages abroad
Manufacturing, transmission and delivery of electric power	Services and works related to anti-fire protection
Mediation in finding jobs abroad	Transactions with scrap metal
Services related to telephone communications (excluding departmental objects), technical maintenance of TV, radio and wire broadcasting in frames of industrial exploitation	Maintenance and exploitation of pipelines
Development, testing, and exploitation of space apparatus and parts thereof, surface space infrastructure and parts thereof, equipment constituting the space segment of satellite systems, excluding TV and radio broadcasting systems	Scientific research related to creation and use of space machinery and technologies (excluding launch vehicles)
Other space-related services, according to the list approved by the Cabinet of Ministers	Transmission, receiving, dissemination of data received from space objects, excluding issues under the jurisdiction of the National Council on Television and Radio Broadcasting
Processing and storage of donor blood and its components, realization thereof and preparations manufactured from them	Activity related to turnover of narcotic drugs, precursors, psychotogenic agents, the list of which is determined by the Cabinet of Ministers of Ukraine
Physical training and fitness activity (the list of physical training and fitness activities liable to licensing is determined by the Cabinet of Ministers of Ukraine)	Trust and other operations with principal's (depositor's) property