In February 2025, a law was published in Ukraine providing for the repeal of the Commercial Code (CC) of Ukraine. This move is aimed at eliminating long-standing collisions between the norms of the Commercial Code and the Civil Code, which frequently complicated contractual practices in the business environment and judicial proceedings.

The primary reason for repealing the Commercial Code was the duplication of many of its articles with the Civil Code. These two codes have been in conflict since their inception. The conflicting norms will now be abolished.

Key Changes and Comparative Characteristics:

1. Repeal of the Commercial Code of Ukraine

• Before: The Commercial Code regulated economic relations in Ukraine, defining the fundamental principles of business activity.

• After: The Commercial Code expires on August 28, 2025, and its provisions are being integrated into other regulatory acts, primarily the Civil Code.

2. Change in Organizational and Legal Forms of Enterprises

• Before: State and municipal enterprises functioned as separate legal entities with the right of economic jurisdiction or operational management.

• After: These enterprises must be transformed into joint-stock companies or limited liability companies, which will facilitate increased operational efficiency.

3. Introduction of the Right of Usufruct

• Before: Enterprises used state and municipal property under the rights of economic jurisdiction or operational management.

• After: The right of usufruct has been introduced as a personal, gratuitous possession and use of state and municipal property, replacing the previous legal regimes.

4. Adaptation Period

• Before: Enterprises operated according to CC provisions without a defined transition period for changes.

• After: A 5-year transition period is provided, during which business entities must adapt their activities to the new requirements.

These changes aim to simplify and unify the legal regulation of commercial relations in Ukraine, eliminating duplication and contradictions between various regulatory acts.

In addition to the changes mentioned above, the repeal of the Commercial Code entails the following important innovations:

• Increased Transparency in Managing State and Municipal Property:

  • Transparent Property Transactions: Transactions involving the property of enterprises where the state owns more than 50% of the shares will be carried out through the Prozorro.Sale system. This ensures transparency and minimizes corruption risks.

  • Financial Reporting: State enterprises are required to publish financial reports, promoting management transparency and public trust.

• Expansion of Territorial Community Rights:

  • Creation of Legal Entities: Territorial communities will gain the ability to create legal entities, allowing them to manage resources more effectively and implement local projects.

• Harmonization with European Standards:

  • Reform of Property Rights: The law is aimed at harmonizing Ukrainian legislation with European standards in the field of property rights, which will improve the country’s investment attractiveness and simplify doing business.

These innovations are directed toward improving corporate governance, increasing the transparency and efficiency of state and municipal property use, and integrating Ukrainian legislation into European standards.