Simplified Bankruptcy for Small Businesses: What Draft Law No. 15024 Changes

Draft Law No. 15024, dated February 10, 2026, “On Amendments to the Code of Ukraine on Bankruptcy Procedures…”, has been registered with the Verkhovna Rada. The document proposes a systemic reform of insolvency procedures for micro and small enterprises, as well as a fundamentally new approach to the relationship between bankruptcy and privatization of state-owned enterprises.

1. Simplified Proceedings: A Separate “Book” for Small Business

The explanatory note explicitly states that the current procedures are excessively costly and lengthy, while their effectiveness remains critically low: according to World Bank data, the recovery rate in bankruptcy proceedings in Ukraine is approximately 9 cents on the dollar. This reality has become the key justification for introducing a dedicated simplified model.

The draft law introduces a new Book into the Code — “Specifics of Simplified Bankruptcy Proceedings” — establishing an autonomous regime for micro and small enterprises.

Eligibility criteria are clearly defined. For microenterprises — up to 10 employees and annual revenue not exceeding EUR 2 million; for small enterprises — up to 50 employees and annual revenue not exceeding EUR 10 million. Additionally, a cap on indebtedness is introduced:

• for legal entities — no more than 2,000 minimum wages;
• for sole proprietors (FOPs) — no more than 1,000 minimum wages.

The key procedural innovation is a strict time limit: simplified proceedings may not exceed 180 days. In Ukrainian practice, where bankruptcy cases often last for years, this represents a structural shift.

At the same time, the model is based on a presumption of good faith, combined with strict safeguards. The draft law clearly defines indicators of debtor bad faith — from providing inaccurate information to fraudulent transactions and deliberate bankruptcy. This creates an important balance between procedural speed and creditor protection.

2. Presumption of Creditor Consent and Limited Cassation Review

The simplified procedure introduces a mechanism that significantly reduces opportunities for delay: if creditors fail to submit objections within the prescribed timeframe, their position is deemed approved.

Furthermore, most appellate court decisions will not be subject to cassation review, except for key rulings — such as recognition of bankruptcy or closure of proceedings. This substantially limits the risk of procedural abuse.

The remuneration of insolvency practitioners is also specifically regulated: eight minimum wages for legal entities and four minimum wages for sole proprietors. As a result, the financial burden for small businesses becomes predictable and capped.

3. Privatization Takes Priority over Bankruptcy

The second conceptual pillar of the draft law concerns state-owned enterprises. It establishes the priority of privatization procedures over bankruptcy proceedings.

The explanatory note highlights the long-standing conflict between these two legal regimes. The draft sets clear safeguards against parallel application and introduces time limits during which bankruptcy proceedings cannot block privatization.

In practical terms, this is a policy decision: once the state adopts a privatization decision, bankruptcy should not prevent the asset from returning to economic circulation.

4. European Context

The authors directly refer to Ukraine’s commitments under the Ukraine Facility program and the need to implement EU Directive 2019/1023. Therefore, the reform is not only domestic but also part of broader legal harmonization with the EU acquis.

Implications for Business and Investors

Draft Law No. 15024 represents one of the most significant attempts to reset the Ukrainian bankruptcy framework since the Code was adopted in 2019. Its underlying logic is speed, predictability, economic efficiency, and the filtering of abuse.

For small businesses, this could mean a genuine “second chance” mechanism rather than a formal liquidation with negligible recovery for creditors. For state-owned enterprises, it seeks to resolve the chronic conflict between insolvency proceedings and privatization policy.

However, the central question lies in enforcement: will the simplified procedure become a real instrument of restructuring and economic recovery, or merely another formal pathway for debt discharge without substantive restructuring?

For legal practitioners, the reform requires immediate strategic reassessment — both from the perspective of debtors and creditors.