Nominee liability in Ukraine under Part 2 of Article 205-1 of the CC: a Supreme Court case

A nominee (a "front person" registered as owner or director) who agrees, for money, to become a participant or director of someone else's company is liable under Part 2 of Article 205-1 of the Criminal Code of Ukraine (CC). The offence is aiding (acting as an accessory to) entering knowingly false information into documents for state registration of a legal entity. It is enough to hand over a passport and a taxpayer identification code and to sign a power of attorney at a notary's office. Other people prepare the documents, but liability also falls on the person in whose name the company was set up. In case No. 953/3842/22, where I acted as defence counsel, the court imposed a fine of UAH 153,000 and a two-year ban on holding certain positions. The convicted person's "salary" in that company for three quarters was only UAH 9,500. The verdict passed the appeal and the Supreme Court. The convicted person was released from punishment because the limitation periods had expired. Below I explain how the prosecution builds its case, which defence arguments the courts rejected, and what to do if a company has been set up in your name.

In brief: 6 key points

• Article 205-1 of the CC punishes entering knowingly false information into documents for state registration of a legal entity and submitting such documents to the registrar. Part 2 covers the same acts committed by a group of persons by prior agreement.
• A nominee who provided a passport, a code and a power of attorney is treated as an accessory (Part 5 of Article 27 of the CC): the nominee supplies the means of committing the offence, even if he or she never drew up a single document.
• The key circumstance is the absence of any intention to run a business. In our case the court treated the person's experience or skills as secondary.
• Cases against nominees often start with the tax authority. In our case the first proceeding concerned the company's evasion of value added tax (VAT) of more than UAH 10.1 million.
• The defence's procedural arguments (investigative jurisdiction of the Bureau of Economic Security (BES), the prosecutors' powers, a typo in the date of a resolution) were rejected by courts at all three levels: such violations do not by themselves make evidence inadmissible.
• The limitation period expired before the appeal was heard. The convicted person did not agree to closing the case, and the court released her not from liability but from punishment (Part 5 of Article 74 of the CC).

Who a nominee is and which article applies

A nominee is a person in whose name a company, or a share in it, is formally registered, although he or she does not intend to manage the business, contribute capital or carry on any activity. Other people need the company: to pass money through it, to claim a VAT tax credit, to avoid paying taxes. The nominee receives a one-off payment or a small "salary".

In its resolution of 04.03.2026 in our case, the Supreme Court described the elements of the offence as follows. The object is the documents that are submitted for registration under the Law of Ukraine "On State Registration of Legal Entities, Natural Persons – Entrepreneurs and Public Organisations". The objective side is entering knowingly false information into them, or submitting such documents to the registrar. The offence is complete once either of these acts is done. Information is false if it does not correspond to reality and misleads the registration authority. The subjective side is direct intent.

The nominee usually does not draw up the documents. So the nominee's acts are classified as aiding: Part 5 of Article 27 of the CC, which covers assisting an offence, in particular by providing means or instruments. In our case the courts held that the means were the original passport, the certificate of the identification code and the notarised power of attorney. Part 2 of Article 205-1 applies because the act was committed by a group of persons by prior agreement.

It is convenient to set out the elements of the offence in a table — these are what the courts checked the charge against in our case.

An important detail from the Supreme Court resolution: the defence pointed out that the company's address was not changed during registration, so there could have been no false information about its location. The court replied that in this case changes to the details of an existing legal entity were registered, not a new legal entity, and that the company's absence from its registered address, established by inspection and a witness's testimony, together with the other evidence confirms the circumstances established by the courts.

Part 2 of Article 205-1 of the CC was applied in the version of Law No. 361-IX of 06.12.2019, which was in force at the time of the events. Check the version in force on the date of your own acts: the penalties under this article have changed.

How the scheme works: case No. 953/3842/22

According to the facts established by the courts, the scheme was typical.

Note the gap in time: registration in May 2020, the indictment in June 2022, the verdict in April 2025. Nominees often think the story ended long ago, yet proceedings begin years later, when the tax authority finds problems with the company.

Which evidence the court found sufficient

The convicted person did not admit guilt and refused to testify, relying on Article 63 of the Constitution. Even so, the court found guilt proven by the combination of the following evidence.

The cassation court separately answered the defence's argument that there was no handwriting expert examination. At no stage did the defence question that the signature on the power of attorney belonged to the convicted person, so no expert examination was needed. As for the argument that she lacked a manager's skills, the court held it to be irrelevant: what matters is that she had no intention of carrying on any activity.

If you signed a power of attorney or documents to register a company that you did not intend to run, refusing to testify does not protect you from a verdict. The courts build the case on the registration file documents, tax data and the inspection of the address, without your explanations.

Why the defence's procedural arguments failed

In this case the defence bet on the inadmissibility of evidence because of violations of the pre-trial investigation procedure. The courts rejected these arguments; most of them were examined at all three levels. I go through them here because these are the arguments most often raised in cases against nominees.

• Investigative jurisdiction. Offences under Article 205-1 of the CC are investigated by the Bureau of Economic Security, but here the police investigated. The courts answered that the First Deputy Prosecutor General had assigned the investigation to the police under Part 5 of Article 36 of the Criminal Procedure Code of Ukraine (CPC) under martial law. The fact that a different body investigated does not violate human rights or make the evidence inadmissible, because the rules for collecting evidence are the same for all bodies.
• Group of prosecutors. The resolution designating the group of prosecutors was issued by a deputy head of the regional prosecutor's office while he was on leave. The court established that no investigative actions were carried out in that period, that after the investigative jurisdiction was determined the group of prosecutors was designated again, and that the prosecutor in the original proceedings kept his powers in the severed case.
• Typo in the resolution on severance of case materials. The resolution bore the date 19 June instead of 29 June. The court questioned the investigator, examined the cover letters and found it to be a technical clerical error that did not affect the lawfulness of the decision.
• Severance before notice of suspicion. The Supreme Court explained that the phrase "a person suspected of committing a criminal offence" in Article 217 of the CPC is not the same as the procedural status of a suspect under Article 42 of the CPC, so case materials can be severed even before notice of suspicion is served.
• Territorial jurisdiction of the court. The defence raised the violation of territorial jurisdiction only in the cassation appeal. Referring to the resolution of the Joint Chamber of the Criminal Cassation Court of the Supreme Court of 24.02.2025 in case No. 357/10207/21, the Supreme Court recalled that such issues must be raised before the trial begins.

The honest conclusion from this case is that formal violations in the investigation documents are rarely a stand-alone ground for acquittal. The courts assess whether the violation affected the rights of the accused and the quality of the evidence. Procedural arguments work when they are combined with a challenge to the facts, not instead of it.

Limitation period: release from liability or from punishment

The decision that mattered most for the convicted person was made by the court of appeal. By the time of the appeal, more than five years had passed since the offence, and the court referred to paragraph 3 of Part 1 of Article 49 of the CC. The court explained to the convicted person that she could be released from criminal liability and the proceedings closed. She refused and insisted on a hearing on the merits, hoping for an acquittal.

In such a situation the court cannot close the proceedings without the accused's consent. So the court of appeal left the verdict in force but released the convicted person from the punishment imposed, under Part 5 of Article 74 of the CC. The court referred to the resolution of the Criminal Cassation Court of the Supreme Court of 11.05.2021 in case No. 127/10146/20: if a person objects to closing the case because of the expiry of the limitation period, the person is released from punishment under the special rule in Part 5 of Article 74. The court met its duty to explain to the accused the right to release from liability in line with the position of the Joint Chamber of the Criminal Cassation Court of 06.12.2021 in case No. 521/8873/18.

In our case the third option came to pass: the fine of UAH 153,000 and the ban on holding positions are not enforced, but the guilty verdict remains. The convicted person made this decision knowingly. How to count limitation periods for offences punishable by a fine, and why sometimes three years apply rather than five, is covered in the article on the limitation period in a criminal case. In this case the parties did not raise the "three or five years" question: by the time of the appeal both periods had expired.

What a nominee risks besides a verdict

• A fine out of proportion to the payment. In our case, UAH 153,000 against UAH 9,500 of accrued income.
• A ban on holding positions or engaging in activity. The court imposed two years as an additional punishment.
• Involvement in the company's tax case. The nominee is questioned as a witness in the tax evasion proceedings, and the testimony becomes the basis for separate proceedings against the nominee. That is exactly how our case began.
• Years of uncertainty. Almost six years passed from registration to the Supreme Court's final decision.

What to do if a company has been set up in your name

1. Check the Unified State Register of Legal Entities using your identification code: see which companies list you as a participant or manager.
2. Recall what you signed. A power of attorney at a notary's office, applications, a charter. Whether you are an accessory or a victim of forgery depends on this.
3. Do not give explanations to the tax authority or the investigation without a lawyer. A witness's testimony in a tax case can become the basis for a charge against you.
4. If the documents were forged without your involvement, file a report with the police and demand that the registration actions be cancelled. This is a different situation, and it should be documented as early as possible.
5. If you are already under suspicion, count the limitation period from the date of registration and discuss a strategy with your defence lawyer: challenging the facts, procedural arguments, release from liability or release from punishment.

For defence in criminal proceedings on economic offences, see the page of the criminal defence lawyer.

Common mistakes

• Thinking "I signed nothing, so nothing will happen". A power of attorney at a notary's office is enough for a court to find you an accessory.
• Relying only on procedural violations by the investigation. As this case showed, without a dispute about the facts they rarely change the outcome.
• Raising a jurisdiction violation too late. Once the trial has begun, such an objection is no longer considered a ground for transferring the case.
• Not challenging the signature when in doubt. If the defence did not claim that the signature was not yours, the court will not order a handwriting expert examination.
• Not counting the limitation period. It determines whether the case can be closed even before the verdict.

Frequently asked questions

What is the liability for registering a company in your name for money?

If a person agreed to become a participant or director of a company without intending to run it, and provided a passport, an identification code or a power of attorney for that purpose, the acts are classified as aiding the entry of knowingly false information into documents for state registration of a legal entity: Part 5 of Article 27 and Part 2 of Article 205-1 of the Criminal Code of Ukraine. Part 2 applies when the act is committed by a group of persons by prior agreement, which is typical for such schemes. In case No. 953/3842/22 the Kyivskyi District Court of Kharkiv imposed on the convicted person a fine of 9,000 tax-free minimum incomes of citizens, that is UAH 153,000, and a two-year ban on holding certain positions or engaging in certain activity. The verdict was upheld by the court of appeal and the Supreme Court. The convicted person was released from punishment only because the limitation periods had expired. The penalties have changed, so the version of the article should be checked on the date of your own acts.

Can I be held liable if I signed nothing except a power of attorney?

Yes. In case No. 953/3842/22 the convicted person did not personally draw up a single registration document: the participant's decision, the charter and the application to the registrar were prepared and submitted by other people. She only gave the notary her passport and the certificate of the identification code, signed a power of attorney to represent her interests as a participant of the company, and handed these documents to the organiser. The Supreme Court held that the passport, the certificate and the power of attorney were means of committing the offence, and that the convicted person was an accessory under Part 5 of Article 27 of the CC. The court considered it decisive that she acted intentionally, for gain, and had no intention of carrying on business activity, being a founder and manager, or forming the charter capital. The size of the payment received, the court noted, does not affect the classification. So a power of attorney at a notary's office is enough of an episode for a prosecution.

What evidence is usually used against a nominee?

The prosecution is built mainly on documents, not on the accused's testimony. In case No. 953/3842/22 the convicted person refused to testify, but the court found guilt proven by the combination of the following evidence: the notarised power of attorney from the company's registration file, the record of inspection of the tax address, which had no office, no sign and no sign of activity, a letter from the building's owner and the testimony of his employee that the company never rented premises there, tax data on the accrued "salary" of UAH 9,500 for three quarters, and the company's bank files obtained through temporary access. No handwriting expert examination was ordered, because the defence did not deny that the signature on the power of attorney belonged to the convicted person. Often the first source of information is the nominee's own testimony, given as a witness in the company's tax case.

Will violations during the investigation, such as wrong investigative jurisdiction, help?

By themselves, rarely. In case No. 953/3842/22 the defence argued that the police investigated instead of the Bureau of Economic Security, that the group of prosecutors was designated by a deputy head of the prosecutor's office while on leave, and that the resolution on severance of case materials bore a wrong date. The courts at all three levels rejected all these arguments. They held that only evidence obtained with a significant violation of human rights is inadmissible, and that the rules of investigative jurisdiction are not part of the procedure for collecting evidence: these rules are the same for the police and the BES. The court confirmed the typo in the date by questioning the investigator and by the cover letters. The defence raised the violation of territorial jurisdiction only in cassation, but such an issue must be raised before the trial begins. Procedural arguments make sense when they are backed by a dispute about the facts.

Which is better: agreeing to close the case because of the limitation period or demanding an acquittal?

This is the accused's decision, and it has a price. If you agree to release from criminal liability, the proceedings are closed on a non-exonerating ground, without a verdict. If you refuse, the court continues the hearing, and the result may be either an acquittal or a guilty verdict. In case No. 953/3842/22 the limitation periods had expired by the time of the appeal, the court explained her right to the convicted person, but she objected to closing the case and insisted on an acquittal. The court of appeal did not acquit: it left the guilty verdict in force and released her from punishment under Part 5 of Article 74 of the CC, as the practice of the Criminal Cassation Court in case No. 127/10146/20 provides. The fine and the ban are not enforced, but the verdict remains. So before refusing to close the case, it is worth soberly assessing how strong your position on the facts is.

What should I do if a company was registered in my name without my knowledge?

If you did not consent, did not sign any powers of attorney and did not hand over your passport, you are not an accessory but a victim of document forgery, and you need to act quickly. Check in the Unified State Register of Legal Entities, using your identification code, which companies list you. File a report with the police about forgery of documents and use of your data, and demand cancellation of the registration actions taken without your will. Keep evidence of where you were on the day the documents were signed, and find out whether you ever lost your passport. If the signature on the documents is not yours, you need to say so at once: in case No. 953/3842/22 the Supreme Court expressly noted that the defence did not challenge the signature, so no handwriting expert examination was ordered. The earlier you record your position, the harder it will be to accuse you of complicity later.

This material is based on the verdict of the Kyivskyi District Court of Kharkiv of 14.04.2025, the ruling of the Kharkiv Court of Appeal of 30.06.2025 and the Supreme Court resolution of 04.03.2026 in case No. 953/3842/22, in which I acted as defence counsel. The verdict entered into legal force on 30.06.2025, and the Supreme Court resolution is final. The personal data of the participants and the name of the company are not given. This article is for information only and is not legal advice for your situation; check the version of the rules on the date of the act.

A company has been set up in your name, and now you are being summoned by the tax authority or an investigator? Write to me before giving any explanations. We will find out what exactly you signed, count the limitation periods and decide on a defence strategy. Consultations are held in Ukrainian or Russian; written communication in English is available.