The Commercial Code is abolished: what’s next?
On 28 August 2025, the Commercial Code of Ukraine will cease to be in force. A new transitional Law will take effect, regulating the activities of legal entities during the transition period. Importantly, businesses can no longer be established in outdated legal forms (state, municipal, treasury enterprises, etc.), and existing entities must undergo reorganisation within three years. The Law introduces new property management rules, clarifies key definitions of economic activity, and sets strict deadlines for terminating or transforming enterprises.
Which legal forms will remain, how property rights will change, and what accountants and auditors should consider — in the analysis by Pavlo Pyrkov, Legal Advisor at Kreston Ukraine.
Key Aspects of the Law
The Law creates a temporary legal framework (essentially a partial continuation of the Commercial Code norms) for the continued operation of the following legal forms:
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state commercial and non-commercial enterprises, treasury enterprises;
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municipal enterprises of all types;
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joint municipal enterprises;
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private, subsidiary, foreign enterprises;
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enterprises of public associations, religious organisations, trade unions;
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consumer cooperative enterprises.
The Law defines core concepts:
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Economic activity — production or provision of goods or services with monetary value.
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Entrepreneurship — economic activity aimed at generating profit.
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Non-profit economic activity — activity without profit purpose.
The Law prohibits state authorities and local self-government bodies from engaging in economic activity.
Business entities are recognised as legal entities and entrepreneurs that conduct economic activity, possess separate property, and bear liability within its limits.
Article 6 also preserves basic forms of associations of legal entities: associations, corporations, consortia, concerns.
Major Legislative Transformations
1. Ban on creating enterprises in old legal forms
From the date the Law takes effect, registering legal entities in forms provided by the Commercial Code becomes prohibited.
After 3 years and 6 months, enterprises in such forms will no longer be allowed to amend their entries in the state register, except for:
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termination registration;
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change of director or termination commission members;
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asset transfer to the State Property Fund;
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changes due to bankruptcy proceedings.
Rights of economic management and operational management will be abolished.
2. Decisions on the future of state and municipal enterprises
Within 6 months:
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the state and municipalities must decide on terminating enterprises (except non-commercial state enterprises);
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enterprises in bankruptcy must receive termination decisions within 6 months after case closure.
Transformations may result in:
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JSCs or LLCs (100% state-owned),
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state non-commercial companies,
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municipal non-commercial companies,
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JSCs or LLCs with retained municipal shares.
3. Commissions and inventory procedures
Termination decisions entail:
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creation of a liquidation or transformation commission,
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creation of an inventory commission (for transformations).
Commissions conduct inventory and prepare a transfer act. Members of commissions are responsible for accuracy.
4. Property rules
After three years, the following fully expire:
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the right of economic management;
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the right of operational management.
State or municipal assets are contributed to the successor’s share capital at book value, without valuation.
Non-privatisable property is transferred under usufruct rights.
Summary
The Law launches a large-scale transition from outdated enterprise forms to modern corporate structures based on the Civil Code.
The biggest changes concern state and municipal enterprises.
For auditors and accountants, while no direct new requirements appear, the implications include:
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ownership structure changes,
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governance changes,
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complexities of financial reporting in the transition period,
additional audit procedures for asset and liability transfer.
Pavlo Pyrkov
Legal Advisor
