The Commercial Code of Ukraine

Date of Entry into Force:
January 1, 2004

The Commercial Code of Ukraine (hereinafter referred to as “the Code”) sets in compliance with the Constitution of Ukraine legal grounds for commercial activity (management), which is based on the variety of business entities of different ownership forms.

The Commercial Code of Ukraine aims at providing growth of business activity of business entities, development of entrepreneurship and on this basis increase of public production efficiency. The Commercial Code also consolidates public commercial order in the economic system of Ukraine.

This Code defines the fundamentals of commercial activity in Ukraine and regulates commercial relations, arising in the process of organization and exercising commercial activity between business entities, as well as between these entities and other participants of relations in the sphere of commercial activity.

Participants of relations in the sphere of commercial activity shall be business entities, consumers, bodies of state power and local self-government, vested with commercial competence, as well as citizens, public and other organizations being founders of business entities, or exercising with respect to them organizational and commercial authorities on the basis of property relations.

Commercial activity in this Code shall mean the activity of business entities in the sphere of social production, aimed at manufacturing and sale of products, execution of works or rendering of services of value character that have price distinction.

Commercial activity, carried out to achieve commercial and social results and in order to obtain profit shall be deemed entrepreneurship, and subjects of entrepreneurship shall be deemed entrepreneurs. Commercial activity may be carried out without the purpose of obtaining profit.

The sphere of commercial relations shall be comprised of commercial and production, organizational and commercial, and internal commercial relations. Commercial and production relations are property and other relations arising between business entities in the course of commercial activity. Organizational and commercial relations in this Code shall be deemed those, established between business entities and subjects of organizational and commercial authorities in the course of managing commercial activity. Internal commercial relations are relations established between structural units of a business entity and relations of a business entity with its structural units.

The following shall not be regulated by this Code:
property and personal non-property relations, regulated by the Civil Code of Ukraine;
land, mountain, forest and water relations, and those associated with the use and protection of flora and fauna, territories and objects of natural reserve fund, atmospheric air;
labor relations;
financial relations with participation of business entities that arise in the process of forming and control over implementation of budgets of all levels;
administrative and other commercial relations with participation of business entities, to which a body of state power or local self-government is not a subject, vested with commercial competence, and does not exercise directly organizational and commercial authorities as regards to the business entity.

The general principles of commercial activity in Ukraine shall be:
securing commercial diversity and equal protection of all business entities by the state;
freedom of entrepreneurial activity within the limits, established by the law;
free circulation of capital, products and services on the territory of Ukraine;
restriction of state regulation of commercial processes in view of the necessity to ensure social orientation of economy, fair competition in entrepreneurial activity, ecological protection of the population, protection of consumer rights and safety of the society and state;
protection of national goods producer;
ban on illegal intrusion of state authorities and bodies of local self-government, their officials in the commercial relations.

The Code consists of the following chapters: the fundamentals of commercial activity, business entities, property basis of commercial activity, responsibility for violations in the sphere of commercial activity, peculiarities of legal regulation in some fields of commercial activity, foreign commercial activity, special regimes of commercial activity and final provisions.

Chapter 'Business Entities' defines legal status of participants of commercial relations, the procedure for their establishment and liquidation, other. It is stated that business entities may be:
commercial organizations - legal entities, established pursuant to the Civil Code of Ukraine, state, communal and other enterprises, set up in accordance with the present Code, as well as other legal entities that carry out commercial activity and are registered according to the established by law procedure;
citizens of Ukraine, foreigners and stateless persons that conduct business activity and are registered as entrepreneurs according to the law.

Chapter 'Property Basis of Commercial Activity” contains provisions regarding legal state of property of business entities, use of natural resources in commercial activity, use of intellectual property rights, securities and corporate rights. According to the Code, the ownership right and other property rights - the right to commercial management, the right to day-to-day management serve as the ground for legal regime of property of business entities on which their commercial activity is based.

Chapter 'Commercial Obligations' contains legal norms regarding the procedure for concluding commercial agreements, prices and pricing policy in the sphere of commercial activity, fulfillment and termination of commercial obligations, recognition of subject of entrepreneurial activity as bankrupt. The Code envisages that commercial agreement aims at establishment, change or termination of commercial obligations. Thereto, the commercial agreement consists of the conditions of agreement that are defined by its parties.

A commercial agreement is deemed to be concluded, if the parties reach agreement according to the procedure and the forms envisaged by law as regards to all significant terms of the agreement. Significant terms shall be those recognized as such by law, or necessary for the agreements of this type, as well as those requiring the parties' consent by demand of either of the parties. 

When concluding commercial agreement, the parties shall in any case coordinate the subject, price and term of the agreement. 

Chapter 'Responsibility for Violations in the Sphere of Commercial Activity' defines general principles of responsibility of participants of commercial relations, principles of compensating losses, while conducting commercial activity, the procedure for imposition of penalty, operative commercial and administrative commercial sanctions. The Code sets that participants of commercial relations shall bear commercial legal responsibility for violations in the sphere of commercial activity by applying to them commercial sanctions on the grounds and according to the procedure envisaged by this Code, other laws and agreements.

Chapter 'Peculiarities of Legal Regulation in Some Fields of Commercial Activity' contains provisions regarding commercial trade activity, commercial mediation, transportation of cargos, capital building, innovation and financial activity and other.

Chapter 'Foreign Commercial Activity' is devoted to regulation of relations that arise between business entities regarding export and import. The Code states that foreign commercial activity of business entities shall mean commercial activity, which in the process of its conducting requires crossing the customs border of Ukraine by property or labor force. All subjects of foreign commercial activity shall be entitled to perform any types of foreign commercial activity and foreign commercial transactions, unless otherwise is set by law.

State regulation of foreign commercial activity shall aim at protection of commercial interests of Ukraine, rights and legal interests of subjects of foreign commercial activity, creation of equal conditions for development of all types of entrepreneurship.

Pursuant to the Code, a special regime of commercial activity shall be set for the special commercial zones; concessions; exclusive (maritime) commercial zones; commercial activity on the state border of Ukraine, on sanitary protective and other guarded territories, on the priority development territories, during emergencies and martial law.

The Commercial Code of Ukraine states that since January 1, 2004 the Laws of Ukraine “On Entrepreneurship”, except for Article 4 of this Law, and “On Enterprises in Ukraine” shall become invalid.
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