The President of Ukraine, Volodymyr Zelenskyi, signed Law No. 4196-IX “On the peculiarities of regulating the activities of legal entities of individual organizational and legal forms in the transition period and associations of legal entities.” This involves the abolition of the Economic Code and the transformation of communal enterprises, informs press service of the Verkhovna Rada.
“Finally, one of the biggest economic reforms will work! The document abolishes the Economic Code – a relic of the Soviet system, which inhibited the development of business and contradicted European norms. Now the rules of the game will be clear and the same for everyone.” – commented on the signing, Deputy Chairman of the Committee for Economic Development, Oleksiy Movchan.
He reminded that according to the law, state enterprises have three years to reorganize into joint-stock companies or limited liability companies, and a large-scale inventory of state property is planned.
The explanatory note to the document states that the repeal of the Economic Code and amendments to the Civil Code regarding the organizational and legal form “association of legal entities” will contribute to increasing the investment attractiveness of the country and the introduction of effective control mechanisms over the use of state and communal property.
The Civil Code is supplemented by provisions that improve corporate governance, in particular, they contain the definition of corporate rights, establish the moment of their occurrence, and also allow the introduction of restrictions for certain persons regarding the ownership or exercise of corporate rights.
In addition, the law excludes from the Civil Code such legal entities under public law as state, communal and joint utility enterprises, while adding provisions regarding the specifics of the transfer of property to the management of a legal entity by its founder.
