Abolition of the Commercial Code

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The Law of Ukraine “On the Specifics of Regulating the Activities of Legal Entities of Certain Organizational and Legal Forms During the Transitional Period and Associations of Legal Entities” (No. 4196-IX), adopted on January 9, 2025 and entering into force on August 28, 2025, abolishes the Commercial Code of Ukraine, which previously defined the general principles governing relations between business and the state.

The key initiator of the legislative proposal was the Speaker of the Verkhovna Rada, Ruslan Stefanchuk. The legislative initiative was also supported by dozens of Members of Parliament (draft law No. 6013).

Proponents of the law stated that it aims to expand economic freedoms. However, the law eliminates foundational norms regulating the interaction between the state and business, as well as principles governing the management of economic activity in the public and municipal sectors.

A number of civil society organizations warned that the law poses risks to national security and may lead to a large-scale redistribution of state assets, particularly given that the Verkhovna Rada did not approve a list of property that cannot be privatized.

The law provides for the compulsory reorganization of all enterprises into companies, which in the public sector may result in a form of indirect privatization and increased oligarchic influence in the economy. It also introduces the legal concept of usufruct over public property, which critics argue is non-transparent.

According to critical assessments, this constitutes a direct violation of the Constitution of Ukraine and the principle of the rule of law, as well as a disproportionate interference in entrepreneurial activity and the constitutional principles governing participation of state and local authorities in economic activity, thereby undermining Ukraine’s constitutionally guaranteed economic diversity.

Alternative approaches to modernizing commercial and economic legislation were reportedly disregarded during the adoption of the law. The draft law No. 6013 was opposed by organizations such as “Holka,” “Environment People Law,” “Ukrainian Nature Conservation Group,” and others, which called on President Volodymyr Zelenskyy to veto the bill. The Association of Ukrainian Cities also expressed opposition to the law.

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