Private Enterprises Must Transform into LLCs by 2028

As of 28 August 2025, the repeal of the Commercial Code of Ukraine has changed the legal framework for private enterprises (PEs). The loss of their regulatory basis requires PEs to undergo a transformation into a limited liability company (LLC) or a joint-stock company (JSC).

Key Transformation Rules

• Completion of transformation: the legal establishment of the new LLC is deemed completed upon its state registration.
• Tax aspects: no separate notification to the tax authorities is required — information is transmitted automatically; PEs and their legal successors are exempt from administrative fees and unscheduled inspections.
• Employment relations: existing employment agreements continue automatically, provided there is no staff reduction or downsizing.
• Licenses and permits: all existing licenses and permits remain valid for their respective duration.
• Encumbrances on property: arrests, prohibitions on alienation, mortgages, or tax liens do not prevent the contribution of property to the charter capital of the new company; however, such encumbrances remain valid for the legal successor.
• Transformation deadline: the final date is 28 August 2028. After this date, failure to comply with the legal requirements will result in the application of the provisions of the Law of Ukraine “On Limited Liability Companies,” and any provisions of a PE’s charter that contradict the law will be deemed invalid.

What Does the Transformation Process Involve?

1. Adoption of a decision by the founder on the transformation.
2. Establishment of a commission and inventory of assets and liabilities.
3. Notification of the state registrar and creditors of the decision.
4. Preparation of a transfer act and formation of the charter capital of the new LLC.
5. State registration of the termination of the PE and establishment of the LLC.
6. Final steps: opening bank accounts, updating electronic keys, and bringing internal policies and contracts into compliance with the LLC status.