* Setting up and registration with the state register of the credit unions

As prescribed with the law of Ukraine, a credit union is a non-profit organization founded by individuals, labor organizations, or their associations on a cooperative basis for the purposes of meeting its members’ needs for mutual lending and provision of financial services at the expense of united monetary contributions made by members of such credit union.

The first stage of establishing a credit union is a state registration of a legal entity.

A credit union is founded based on a relevant decision made by a foundation meeting. The number of founders (members) of a credit union may not be below 50 persons, who – as set forth with the law – may join a credit union and united based on at least one of the following signs: common place of employment or study, or common labor organization, association of labor organizations, other non-governmental or religious organization, or residence in the same location: village, town, city, district, region.

A person becomes a member of a credit union as soon as he/she pays subscription and mandatory equity contribution in accordance with the procedure stipulated with the credit union charter.

Members of a credit union are held liable for obligations of the credit union only to the extent of their equity contributions.

The second stage of establishing a credit union is its registration with the state financial institution register.

To obtain a status of a financial institution, a legal entity registered with the Unified State Register as a credit union must comply with the legal requirements. In particular, the charter and management bodies of a credit union must meet the legal requirements set for the credit unions. Subscription and mandatory equity contributions must be paid by all founders (members) of a credit union. Credit union head and its chief accountant must meet the requirements set to heads and chief accountants of financial institution provided in the relevant regulations. Domestic regulations of a credit union must be approved in accordance with the established procedure and must comply with the legal requirements. Credit unions must be provided with software and special technical equipment that meet the legal requirements. A credit union must have a separate restricted-access premise and a vault for money (cash resources) and documents that prevent their being stolen (damaged).

A credit union is entitled to provide financial services via its detached divisions only if relevant information on each of such detached divisions is entered to the Register and a certificate of registration of a credit union’s detached division with the financial institution register is obtained. A copy of such certificate must be displayed in a detached division in places accessible for the customers.

Without a license, a credit union may provide financial loans at the expense of the credit union capital, as well as funds of associated credit unions raised by the credit union joining such association, and funds of joint financial funds of associated credit unions established by their members.

Activity of a credit union related to raising deposits (contributions) from members of a credit union to deposit accounts, use of such funds for provision of loans and financial credits at the expense of funds raised (bank credits, funds of other institutions and organizations) is subject to licensing.

KD CONSULTING law & consulting firm  firmprovides a full range of services related to establishment of a credit union: starting from incorporation of a legal entity and its registration with the financial institutions register and ending with licensing and entering of information on detached divisions into the register. We provide consultancy and prepare a required package of documents fully complying with the legal requirements and regulations of the National Financial Service Commission.

Large experience of our specialists in establishment of various financial institutions and confidence in our legal position allow for avoiding risks of refusal and dismiss of your documents submitted.