Legal support for financial companies differs from standard corporate legal support in that, in this sector, the cost of a mistake is the loss of a licence. Failure to meet requirements regarding capital, ownership structure or the business reputation of directors does not result in a fine, but in the suspension of operations.
We work with companies that provide financial services, as well as with businesses that purchase these services or structure transactions in the financial market.
Our second major area of focus is transactions: pre-acquisition due diligence, structuring, and protecting the buyer’s interests in the contract.
+38 095 554-54-24 — legal advice
Areas of practice
Financial companies
- Registration of a factoring company — requirements regarding capital, ownership structure and the reputation of directors
- Obtaining licences and permits, managing relations with the regulator
- Bringing operations into compliance with legal requirements
Factoring
- Bank factoring
- Recourse factoring
- Structuring factoring agreements, assessing risks for both parties
Transactions and investments
- Due diligence — vetting a company prior to a transaction
- Acquisition of company assets — structuring, protection of the purchaser
- Support for an investor’s entry into the share capital, corporate agreements
Debts and claims
- Debt buy-out — assignment of claims
- Debt recovery
- Bankruptcy of a legal entity
What determines the outcome of financial transactions
Structure is more important than price. Buying a company along with its debts and buying its assets are two fundamentally different transactions. The difference in consequences may exceed the value of the transaction itself.
Check before, not after. An identified risk is a reason to lower the price. A purchased risk is your liability.
AMCU approval. Transactions exceeding the established concentration thresholds require prior approval. Without it, there is a fine and the risk of the transaction being declared invalid.
Protection in the contract. Seller’s warranties, compensation for losses, retention of part of the price, conditions precedent. A standard ‘template’ contract drawn up by the buyer offers no protection whatsoever.
Compliance with regulatory requirements. For financial companies, this is a condition of business, not a mere formality.
Factoring: what to check
Factoring is financing in exchange for the assignment of a monetary claim. For the supplier, it is a way of receiving payment immediately, without having to wait for payment from the buyer.
The key question is who bears the risk of non-payment:
- non-recourse factoring — the risk is borne by the factor. It is more expensive, but the supplier has peace of mind.
- recourse factoring — if the debtor fails to pay, the factor turns to the supplier. It is cheaper, but the risk remains with you.
Confusion over this point is the main cause of disputes. This is precisely where you need to read the contract carefully.
What else to check: whether the factor is authorised to provide this service, whether the debtor has been notified of the assignment, whether the assignment conflicts with the terms of the main contract (it may contain an explicit prohibition), and the actual cost of financing, taking all fees into account.
When you don’t need a solicitor
A standard agreement with a trusted counterparty for a small sum — a basic check will suffice.
You need a solicitor when:
- you are buying a business or acquiring a stake;
- you are setting up a financial company or obtaining a licence;
- you are entering into a factoring agreement — and are unsure who bears the risk;
- the agreement requires approval from the AMCU;
- you are acquiring a debt portfolio;
- the counterparty has debts, court proceedings or signs of insolvency.
Cost of services
| Service | Price |
|---|---|
| Consultation | from 1,500 UAH |
| Legal opinion, due diligence | from 5,000 UAH |
| Drafting or reviewing a contract (factoring, asset purchase, investment) | from 5,000 UAH |
| Support with the registration of a financial company and obtaining a licence | from 5,000 UAH |
| Pre-litigation settlement, negotiations | from 5,000 UAH |
| Preparation of procedural documents | from 5,000 UAH |
| Participation in one court hearing | from 3,000 UAH |
| Litigation support | from 10,000 UAH |
| Comprehensive ‘turnkey’ support for commercial cases | from 30,000 UAH |
| Support in international commercial arbitration disputes | from 40,000 UAH |
Questions and answers (Legal support for financial companies)
Which is safer: buying a company or its assets?
Assets. When you buy a company, you acquire it along with its debts, tax arrears and legal disputes. When you buy assets, you acquire only the property.
Who bears the risk of non-payment in factoring?
It depends on the type. In non-recourse factoring, it is the factor. In recourse factoring, it is the supplier: if the debtor has not paid, the factor turns to you.
Is AMCU approval required for the transaction?
If the participants’ indicators exceed the established concentration thresholds – yes, and it must be obtained in advance. A transaction without approval carries a fine and the risk of invalidity.
What does due diligence provide?
A list of risks with an assessment of their consequences. This then serves either as grounds to withdraw from the transaction, an argument for reducing the price, or a basis for changing its structure.
Can a claim be assigned if the contract contains a prohibition?
The main contract may contain an explicit prohibition on assignment. Breach of such a condition is grounds for a dispute, so the contract must be reviewed before the transaction takes place.
What are the requirements for a financial company?
Requirements regarding capital size, ownership structure, and the business reputation of directors and owners. Non-compliance does not result in a fine, but in the suspension of operations.
Is it possible to purchase a debt owed by a private individual?
Yes, but you must check: whether the debt actually exists, whether the limitation period has expired, and whether the debtor has any assets. An overdue claim against a person with no assets is worthless.
How long does due diligence take?
From a few weeks for a focused review to several months for a full audit of a large company. The scope and timeframe are agreed in advance.
What documents are required to get started?
The company’s details or a draft contract. A preliminary risk assessment based on public registers can be provided at this stage.
Contacting a solicitor at Svarog for legal support for financial companies
Send us the draft contract or the details of the company with which you are planning to enter into an agreement — we will assess the risks using public registers and advise you on what changes should be made to the structure of the agreement before signing. Once the agreement has been signed, there are far fewer options available.
+38 095 554-54-24 · Kyiv, 7 Khoriva Street (Podil) · Mon–Fri 9:00–18:00