Important legislative changes for Ukrainian businesses

On August 28, 2025, the Commercial Code of Ukraine (hereinafter referred to as the CCU) ceased to be in force on the basis of Law of Ukraine No. 4196-IX dated January 9, 2025, “On the Specifics of Regulating the Activities of Legal Entities of Certain Organizational and Legal Forms During the Transition Period and Associations of Legal Entities” (hereinafter referred to as the Law).

The Law introduces a three-year transition period until August 28, 2028, during which specific rules are established for legal entities registered before the date of entry into force, in particular state-owned, municipal, private, subsidiary, foreign enterprises, etc.

Thus, the Law expressly prohibits the creation of new legal entities in the organizational and legal forms traditional for the Civil Code. This means that:

• State and municipal enterprises must be transformed into business entities. In the vast majority of cases — into LLCs or JSCs.
• Private enterprises are not automatically liquidated, but they lose the possibility of existing within the old model — in case of conflict with the provisions of the LLC legislation, the latter shall apply.
• Subsidiaries and foreign enterprises that operated without a clear definition as LLCs or JSCs must either transform into general organizational and legal forms or update their founding documents to reflect the new requirements.

Until the end of the transition period (August 2028), certain prohibitions and restrictions apply:

• No changes may be made to the statutes of enterprises, except in clearly defined cases (change of manager, location, liquidation, reorganization).
• The creation of new legal entities in outdated forms (state-owned enterprises, municipal enterprises, private enterprises) is prohibited.

After the transition period ends, legal entities that have not brought their activities into compliance may be deemed to be operating in violation of the law, with the corresponding legal consequences.

It should also be noted that after the abolition of the Civil Code, all contractual obligations of legal entities remain in force — this is one of the main principles of the transition period established by the Law. The provisions of the Civil Code that previously regulated economic obligations will be gradually replaced by the provisions of the Civil Code, the Law, and special laws on specific areas of activity (e.g., energy, transport, financial leasing, etc.).