A major shift in the legal landscape for businesses in Ukraine is on the horizon as Law № 4196, which sets the Regulation of Activity of Legal Entities of Certain Organisational and Legal Forms in Transition Period (Transitional Law), comes into effect on 28 August 2025. This new legislation effectively abrogates the Economic Code, marking a significant milestone for private enterprises operating in the country.
Areas of Concern
While the most notable changes will primarily affect governmental entities and some types of associations, all businesses are urged to examine their existing documentation for necessary adjustments. The abrogation will alter various aspects of corporate structure, legal status, and company management, necessitating updates to charters and incorporation documents to align with the new regulations.
Businesses should also pay close attention to their contractual arrangements and templates in place. Many agreements, particularly those previously defined under the Economic Code, will require reevaluation. This includes contracts such as agency agreements, which will now need detailed provisions explicitly included within the contract documents, as the definition itself is removed from the law. The previous practice of simply referencing articles from the Economic Code is no longer appropriate.
Necessity of Contract Reviews
The new Transitional Law also modifies the parties' positions concerning contractual sanctions and limitations in legal action. This does not mean that old contracts concluded before the changes and containing relevant provisions are anyhow vitiated. However, to ensure that any newly entered transactions contain the desired provisions which function efficiently, they have to be revisited.
Overall, the changes mark a significant shift in Ukraine’s commercial law, urging businesses to respond swiftly and strategically to prevent potential legal issues. If you require more guidance on navigating the new challenges in your business documentation, please do not hesitate to contact us.