The Commercial Code of Ukraine Abolished: What Changes for Business

On August 28, 2025, Law No. 4196-IX “On the Peculiarities of Regulating the Activities of Legal Entities of Certain Organizational and Legal Forms During the Transitional Period and Associations of Legal Entities” entered into force. On the same day, the Commercial Code of Ukraine (CCU) was repealed. From now on, all commercial relations will be governed by the Civil Code of Ukraine (CCU) and special laws.

Repeal of the CCU and the Transitional Period

According to Article 17 of Law No. 4196-IX, the Commercial Code lost its force on August 28, 2025. At the same time, the law established a three-year transitional period, during which existing legal entities may continue to operate in their current forms, but no new enterprises in the forms of state, municipal, private, or foreign enterprises can be created. During this period, the “old” enterprises must be transformed into business companies — LLCs or JSCs. For state enterprises, such transformation is mandatory: in the absence of a reorganization decision, their assets will be transferred to the State Property Fund.

New Rules for Property

A major innovation is the reform of the institutions of economic management rights and operational management rights. Instead of these Soviet-era constructs, the law introduces the right of usufruct — free possession and use of property. Some assets will be transferred into the ownership of newly established companies, while others will be held under usufruct. Article 14 of the law outlines the procedure for inventorying such property and determining its further legal regime.

Economic Activity and Legal Entities

Despite the repeal of the Commercial Code, the concept of an “economic entity” remains. Article 2 of Law No. 4196-IX defines such an entity as a participant in economic relations that conducts economic activity, has separate property, and is liable within that property. Economic entities include business organizations — legal entities established under the Civil Code — as well as sole proprietors. The same article defines “economic activity” and distinguishes between entrepreneurial (profit-oriented) and non-commercial (non-profit) activity.

Depending on the number of employees and income, entities are classified as micro, small, medium, or large enterprises. Relevant clarifications have also been added to Article 20 of the Commercial Procedure Code to ensure uniform interpretation in judicial practice.

Sanctions and Corporate Governance

The law also addresses economic and administrative-economic sanctions. Article 15 of Law No. 4196-IX provides their list, which has largely remained the same: compensation of damages, administrative-economic fines, confiscation of profits, or suspension of licenses. At the same time, the law specifies that sanctions established by the Tax Code and Customs Code fall outside its scope.

Corporate governance has undergone significant reform. Article 97 of the Civil Code now allows a sole participant — an individual — to manage a company directly, without establishing an executive body. Meanwhile, the new Article 99-1 of the Civil Code specifies the range of company officers, which now includes not only the director or members of the executive body, but also the chief accountant, corporate secretary, and members of the supervisory board. These officers are subject to explicit fiduciary duties: to act in good faith, reasonably, and solely in the interests of the company.

Contracts and Judicial Practice

Commercial contracts concluded under the norms of the repealed Commercial Code remain valid. The law has no retroactive effect, so references to the Commercial Code in already signed agreements do not render them invalid. However, it is advisable to gradually replace such references with provisions from the Civil Code and relevant special laws. It is also worth recalling the position of the Grand Chamber of the Supreme Court (decision of June 29, 2021, in case No. 916/2813/18), which emphasized that a “private enterprise” is not an independent legal form but rather a classification feature. This approach is particularly relevant now, as all such structures are subject to transformation into LLCs, additional liability companies, or cooperatives.

Conclusion. The abolition of the Commercial Code is not merely a formal step. It marks a transition to a new system in which business rules are unified, and regulation becomes more predictable. For enterprises, this means conducting an audit of their organizational and legal form, founding documents, and property regime. For lawyers, it means adapting corporate procedures, updating contracts, and protecting clients in commercial disputes.