Abolition of the Commercial Code: the Rada told about the details of the reform
The Committee on Economic Development is working on a draft law on peculiarities of regulating business activities of certain types of legal entities and their associations during the transition period.
Oleksiy Movchan, Deputy Chairman of the Committee on Economic Development, comments on the main aspects of the draft law on peculiarities of regulating business activities of certain types of legal entities and their associations during the transition period (Reg. No. 6013) prepared for the second reading.
"This is a major reform designed to radically change approaches to the management of state-owned and municipal enterprises. It introduces mechanisms that should help increase investment attractiveness and integrate Ukraine into international economic standards.
Why is this reform important?
It streamlines legal relations in the area of state ownership and corporatization of state-owned and municipal enterprises. This is part of the requirements of the Ukraine Facility Plan. The proposed amendments bring Ukraine closer to the standards of the Organization for Economic Cooperation and Development (OECD), which insists on corporatization of all state and municipal unitary enterprises by transforming them into joint stock companies or limited liability companies.
This will help increase transparency in the management of state property and strengthen accountability for its use. It will also provide the state with the opportunity to make a profit from capital, not just from asset management.
The main provisions of the draft law are reg. № 6013:
1. Corporatization of state and municipal enterprises:
During the transition period, state and municipal unitary enterprises should be transformed into joint stock companies or limited liability companies. That is, they should be corporatized.
2. Change the legal regime of state and municipal property:
The property transferred under the right of economic management should be inventoried and included in the authorized capital of the new JSCs or LLCs.
Property that is not subject to privatization will be transferred on the right of usufruct, which allows it to be used with additional state control.
3. More transparency and accountability in the management of property of enterprises with a share of state ownership:
All transactions with the property of enterprises in which the state owns more than 50% of shares will be carried out through electronic auctions in the Prozorro.Sale system, i.e., at open and transparent auctions.
Such enterprises are also required to publish procurement announcements and reports on their results in the Prozorro procurement system.
4. Unification of legal regulation for atypical organizational and legal forms:
The founders of legal entities with atypical organizational and legal forms may decide to transform them into limited liability companies, reducing their status to the general rules of LLCs.
5. Disclosure of financial statements:
State-owned enterprises and companies with a state share of more than 50% are required to publish their financial statements on the Unified State Portal, which will ensure transparency and accountability.
The implementation of these provisions will help create a uniform, transparent and predictable environment for state-owned, municipal and private enterprises. This will allow attracting investments into the Ukrainian economy, simplify the management of state property, minimize corruption risks and bring Ukrainian commercial law closer to international standards."