The Rada insists on abolishing the Commercial Code

Oleksiy Movchan, Deputy Chairman of the Committee on Economic Development, comments on the main aspects of the draft law on peculiarities of regulation of entrepreneurial activity of certain types of legal entities and their associations during the transition period (Reg. No. 6013), which the Committee recommends the Verkhovna Rada of Ukraine to adopt as a whole as a law.

It should be noted that the draft law proposes to repeal the Commercial Code of Ukraine, the provisions of which mostly have no regulatory effect, are declarative in nature, and contradict other legal acts and general principles of civil law.

Oleksiy Movchan emphasizes: "This is a large-scale reform that will fundamentally change the approach to the management of state-owned and municipal enterprises. Its goal is to streamline legal relations in the field of state property, increase investment attractiveness and ensure Ukraine's integration into international economic standards.

The draft law proposes:

Corporatization of enterprises. All state and municipal unitary enterprises should become joint stock companies or LLCs. This is a modern format that meets international standards.

Transparent property management. Transactions with the property of enterprises where the state owns more than 50% of the shares will be carried out through the Prozorro.Sale system. This guarantees openness and minimizes corruption risks.

Financial reporting. State-owned enterprises are required to publish financial reports. This will make management accountable to the public.

Property with additional control. For non-business assets that are not subject to privatization, a mechanism of usufruct is introduced. This will ensure their rational use under state supervision.

Let's take a closer look at corporatization.

The corporatization of state-owned enterprises is mandatory during the transition period, which ensures their transformation into modern corporate structures. For municipal enterprises, this process is supposed to be more flexible, as there are no sanctions for communities for refusing to transform.

This provision is of key importance, as it allows communities across Ukraine to flexibly use corporatization as a tool for

• attracting international investors to participate in the capital
• modernization of fixed assets;
• obtaining loans at European rates for corporatized enterprises.

The Ukrainian government has identified corporatization as one of the key elements of reforms in its Ukraine Facility Plan. The document envisages completion of the transformation of utility companies into corporate structures by 2025-2026. Also, starting from 2027, subsidized financing of such enterprises from the state and local budgets will be prohibited, which will encourage them to become self-sufficient and introduce effective business models.

The European Union and the Organization for Economic Cooperation and Development (OECD) actively recommend corporatization as an effective tool for increasing transparency of management and attracting investment. The Ukrvodokanalekologiya Association expresses particular support for corporatization, which also considers it an important step in reform.

Therefore, the importance of Draft Law No. 6013 cannot be overstated. This reform is a step towards modern, responsible and transparent management of state property. It will make the Ukrainian economy stronger, more efficient and more attractive."