The Rada is recommended to abolish the Commercial Code

The Committee on Economic Development recommends that the Verkhovna Rada adopt as a whole the draft law on peculiarities of regulating business activities of certain types of legal entities and their associations during the transition period.

At its meeting on October 24, 2024, the Committee considered the draft Law on Peculiarities of Regulation of Business Activities of Certain Types of Legal Entities and Their Associations in the Transition Period (Reg. No. 6013), prepared for the second reading.

The provisions of the draft law are aimed at improving corporate governance in legal entities based on state and municipal property, increasing the country's investment attractiveness, introducing effective mechanisms for controlling the use of state and municipal property, and eliminating contradictions between the Civil Code of Ukraine and acts of special legislation.

The above-mentioned draft law amends the Civil Code of Ukraine, repeals the Commercial Code of Ukraine, introduces a transitional period for the gradual termination of "enterprises" and their transformation into business entities, and amends a number of special laws to bring them into line with the Civil Code of Ukraine.

The draft law takes into account the best practices of corporate governance, in particular in terms of defining the responsibilities of officers of legal entities, replaces the concepts of "right of economic management" and "right of operational management" with clear and predictable private law structures for the use (lease) and management of other people's property, and introduces effective and market-based mechanisms for controlling the ownership and management of state and municipal property by newly formed companies and institutions into the civil legislation of Ukraine.

The members of the working group set up under the Committee to prepare the draft law for the second reading held a significant number of meetings to harmonize the current norms and criteria with the relevant provisions of European legislation, in particular, to improve the procedure for the termination of a legal entity, and processed more than 1,225 proposals and amendments received from representatives of public authorities, investors, NGOs, businesses and other stakeholders. As a result, an agreed version of the draft law was developed.

Following the discussion, the members of the Committee decided to recommend to the Verkhovna Rada of Ukraine to adopt the draft law as a whole following the second reading.