Types of Enterprises and Organizational-Legal Forms of Business in Ukraine

An entrepreneur establishing a new business as a legal entity can no longer rely on the list of enterprise types in the Commercial Code of Ukraine: this Code ceased to be effective on August 28, 2025. The establishment of new private enterprises, subsidiary enterprises, foreign enterprises, state-owned and municipal enterprises, and several other enterprise-based legal forms is prohibited. For a new private business, the main legal entity forms remain a limited liability company, an additional liability company, a joint-stock company, a general or limited partnership, and cooperative forms provided for by law. Separate rules apply to farming enterprises in the agricultural sector.

Enterprises that existed in the old legal forms before August 28, 2025, have not been automatically liquidated. A three-year transition period applies to them until August 28, 2028. In particular, the Law on Limited and Additional Liability Companies already applies to private, subsidiary, and foreign enterprises, enterprises of citizens' associations, and consumer cooperative enterprises in matters not regulated by their charters and other laws. If the owner of such an enterprise does not decide to terminate it during the transition period, the rules governing limited liability companies will apply to its activities after the period ends, and conflicting provisions of its charter will be invalid.

What Does «Enterprise» Mean Now?

Following the repeal of the Commercial Code, the term «enterprise» should not be used as a universal designation for any legal entity or business.

Law No. 4196-IX uses this term primarily for legal entities that were already registered on the date the Law took effect in one of the old organizational and legal forms specified by it: state-owned, municipal, jointly owned municipal, private, subsidiary, or foreign enterprises, enterprises of citizens' associations, or consumer cooperative enterprises.

Therefore, for a new business, it is more accurate to distinguish between:

The Civil Code provides that entrepreneurial companies established to earn and distribute profits among participants may exist as business companies — general partnerships, limited partnerships, LLCs, additional liability companies, and joint-stock companies — or as production cooperatives, agricultural cooperatives, and cooperative associations provided for by law that operate for profit.

Which Organizational and Legal Forms Can a New Business Choose?

Limited Liability Company — LLC

An LLC is one of the main forms for private business. The company is liable for its obligations with all property belonging to it and is not liable for the personal obligations of its members. The law does not limit the number of members. Members who have not fully paid their contributions are jointly and severally liable for the company's debts within the unpaid portion of each member's contribution.

An LLC may operate under its own charter or a model charter. The model charter offers multiple options: founders may select provisions approved by the Cabinet of Ministers, while details of the members, capital, and ownership interests are determined by the founders' decision.

An LLC is generally suitable for a business that needs a separate legal entity, allocation of ownership interests among owners, and a corporate governance mechanism.

Additional Liability Company

An additional liability company is structurally similar to an LLC in many respects, but its members have broader liability. Article 56 of the Law on Limited and Additional Liability Companies establishes that members of an additional liability company bear joint and several additional, or subsidiary, liability with their own property in an amount specified by the charter. This amount must be the same multiple of each member's contribution.

Choosing this form therefore means that members consciously accept a greater risk to their personal property than in a standard LLC.

Joint-Stock Company — JSC

The authorized capital of a joint-stock company is divided into shares. The law distinguishes between private and public joint-stock companies. Only a public JSC may make a public offering of its shares. A public JSC may be established by changing the type of a private JSC to a public one or by transforming another business company. A joint-stock company may have a single shareholder.

This form is primarily appropriate when the business model involves share capital and the regulation of corporate rights through shares.

General Partnership

A general partnership should not be referred to as a «full liability company» — the law does not establish a separate organizational and legal form under that name.

In a general partnership, the partners conduct business on behalf of the partnership and bear joint and several additional liability for its obligations with all their property that may be subject to enforcement. If the partnership's own property is insufficient to settle its debts with creditors, liability passes to the partners.

Because of this level of personal financial risk, this form differs substantially from an LLC.

Limited Partnership

A limited partnership combines two categories of participants: general partners and limited partners. General partners are subject to rules similar to those governing general partnerships, while limited partners participate through their contributions and have a different scope of rights and liabilities. Special rules are established in Articles 133–139 of the Civil Code.

Cooperatives

The Civil Code permits the establishment of production cooperatives, as well as agricultural cooperatives and agricultural cooperative associations operating for profit, for entrepreneurial activities. Alongside the Civil Code, special laws governing the relevant types of cooperation apply to them.

Farming Enterprise

Agriculture is subject to the special Law of Ukraine «On Farming Enterprises». It defines a farming enterprise as a form of entrepreneurial activity by citizens aimed at producing, processing, and selling agricultural products for profit on the relevant land plots. Therefore, an agricultural business must consider not only general corporate rules but also special land and farming regulations.

Which Types of Enterprises Can No Longer Be Established?

Since August 28, 2025, Law No. 4196-IX has expressly prohibited the establishment of legal entities in several organizational and legal forms.

This is particularly important for entrepreneurs who previously considered a «private enterprise» an alternative to an LLC. A new private enterprise can no longer be registered. However, an existing private enterprise does not automatically become an LLC merely because Law No. 4196-IX has entered into force.

Before the transition period ends, the owner may decide on the business's future structure in accordance with the law. If no such decision is made, after the transition period the provisions of the Law on Limited and Additional Liability Companies governing LLC activities will apply to the private enterprise, and conflicting charter provisions will cease to be valid.

Form of Ownership and Organizational and Legal Form Are Different Concepts

An LLC, JSC, or general partnership is an organizational and legal form. Private, state, or municipal ownership describes who owns the property.

The Civil Code separately regulates private ownership by individuals and legal entities, state ownership, and municipal ownership by territorial communities. Therefore, it is incorrect to treat «LLC», «state-owned», and «private» as equivalent categories: the first describes a legal form, while the others concern ownership.

«Mixed ownership» is also not a universal independent organizational and legal form for a new enterprise. For example, a business company may have different types of members, while JSC shareholders may include individuals, legal entities, the state, or a territorial community. The composition of owners should be considered separately from the name of the organizational and legal form.

Business Categories by Size: Micro, Small, Medium, and Large

To determine the category of a business entity, Law No. 4196-IX uses the number of employees and annual revenue.

For these criteria, euro-denominated revenue is converted using the official hryvnia exchange rates against foreign currencies established by the NBU, averaged over the relevant calendar year. For micro, small, and large business entities, the applicable employee and revenue criteria must be met simultaneously. Under these rules, only a legal entity may qualify as a large business entity.

Financial Reporting Criteria Are Different

Do not confuse the classification of business entities with the classification of enterprises for accounting and financial reporting purposes. The Law «On Accounting and Financial Reporting in Ukraine» uses three indicators — assets, net revenue, and number of employees — and classification into the relevant category requires meeting at least two criteria.

A small enterprise must first fail to meet the criteria for a microenterprise, a medium enterprise those for a small enterprise, and a large enterprise those for a medium enterprise. This classification is relevant to the application of accounting and financial reporting legislation.

Sole Proprietorship vs. Legal Entity: Key Differences

A Sole Proprietorship is not a separate legal entity. The entrepreneur remains the individual who completed state registration. A Sole Proprietorship is liable for business obligations with all their property, except property that cannot be subject to enforcement under the law. For a married entrepreneur, Article 52 of the Civil Code also sets out rules concerning personal property and the entrepreneur's share of jointly owned marital property.

Organizational and legal form and taxation system are also different matters. Tax obligations are determined by the Tax Code based on taxpayer status, the selected or mandatory tax regime, transactions performed, and other criteria established by the Code. Establishing an LLC does not automatically result in a particular tax rate, just as Sole Proprietorship status does not itself exempt an entrepreneur from the conditions of a particular tax regime.

How to Register a Legal Entity and Which Documents Are Required

State registration of legal entities and Sole Proprietorships is carried out under Law No. 755-IV by entering information in the Unified State Register. The law remains in force, and its current version incorporates amendments that took effect in 2026.

The specific document package depends on the organizational and legal form chosen and the composition of the founders. For the establishment of a legal entity, the law provides, in particular, for an application for state registration and, where the entity operates under its own founding document, the relevant founding document. Other documents expressly required by Article 17 of Law No. 755-IV must also be submitted for certain forms and circumstances. The law sets requirements for the form and content of founding documents.

For an LLC, the founding document is its charter, but the law allows it to operate under a model charter. If a model charter is chosen, the special procedure provided for by the Law on LLCs and the Law on State Registration applies.

It is not advisable to create one universal «document package» for all legal entities: additional requirements may apply to JSCs, farming enterprises, cooperatives, legal entities with foreign founders, or businesses in regulated industries.

How to Verify a Business's Legal Form and Owners

The official source of registration information is the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Associations.

The Register contains, among other things, the organizational and legal form of a legal entity, its name, registration code, registered address, and legally required information about founders or members. Legislation also establishes rules concerning information on ultimate beneficial owners and ownership structures.

Therefore, when checking a counterparty, do not rely solely on the abbreviations «LLC», «private enterprise», or other terms used in an agreement. Verify the current registration information.

Do Licenses, Permits, ECR Requirements, and Premises Regulations Depend on the Type of Enterprise?

The organizational and legal form alone does not determine the entire range of permits, licenses, premises requirements, personnel requirements, delivery rules, labeling requirements, or goods storage conditions. These requirements depend primarily on the specific activity and products.

The Law of Ukraine «On Licensing Types of Economic Activity» establishes that activities not listed in Article 7 are not subject to licensing. The grounds for issuing, refusing, suspending, renewing, or terminating a license are established by law, while special rules apply to particular sectors. Therefore, first identify the planned activity and then check whether a license and corresponding licensing conditions are required.

Similarly, the use of an ECR or PECR depends on the nature of settlement transactions and exceptions established by Law No. 265/95-VR and the Tax Code, rather than solely on whether the seller operates as a Sole Proprietorship or LLC. The law defines settlement transactions as including the acceptance of cash, payment cards, and other legally specified payment instruments from buyers in exchange for goods or services.

Thus, after choosing an organizational and legal form, separately check the rules for the intended business: licensing, permits, ECR/PECR, taxes, personnel, premises, products, labeling, storage, and transportation requirements. There is no single universal set of such requirements for an ordinary LLC or Sole Proprietorship.

Associations of Legal Entities: Association, Corporation, Consortium, and Concern

Following the repeal of the Commercial Code, the rules governing these associations are contained directly in Law No. 4196-IX. An association is established by two or more legal entities and itself acquires legal entity status.

Such an association should not be confused with the organizational and legal form of an individual business. For example, an LLC may be a member of an association without ceasing to be an LLC.

How to Choose a Business Form

The choice should start not with the name but with the legal and financial model of the future business.

For most ordinary private businesses that need a legal entity with one or more owners, the law provides for an LLC as one of the main forms. However, the decision should take into account specific contracts, risks, investors, taxes, and industry requirements.

Accounting for Multiple Sole Proprietorships and Legal Entities in Torgsoft: Separate Goods, Payments, and Documents by Enterprise

Torgsoft supports working with several enterprises or entrepreneurs in a single inventory and business management system. A specific enterprise can be selected for transactions, and a default enterprise can also be configured. In a goods receipt, goods are associated with the selected enterprise, and that association can be taken into account in subsequent accounting transactions.

Links to a specific enterprise are also provided for financial documents, payments, partner balances, and returns of goods to suppliers. This makes it possible to separate transactions legally belonging to different Sole Proprietorships or legal entities within one database and avoid mixing them in internal records.

Torgsoft also provides sales and goods movement analytics by enterprise. This distinction is particularly important when several business entities operate in one retail system: the software helps associate goods and financial transactions with the appropriate enterprise, but such an association does not itself change an entity's legal status, taxation system, licenses, or obligations to the state.

Example of Applying the New Rules

The reform is already being applied in practice. For example, by Order No. 1053 of May 27, 2026, the State Property Fund of Ukraine decided to transform the state-owned enterprise «Chornomorsky Yacht Club» into the limited liability company «Chornomorsky Yacht Club», with 100% of the ownership interests held by the state. The Fund also publishes similar decisions concerning other state-owned enterprises. This demonstrates the mechanism established by Law No. 4196-IX: an enterprise in an old organizational and legal form is replaced by a business company, while the state may remain the owner of the corporate rights.

Official Sources

• Law of Ukraine «On the Specifics of Regulating the Activities of Legal Entities of Certain Organizational and Legal Forms During the Transition Period and Associations of Legal Entities» dated January 9, 2025, No. 4196-IX — Articles 1–6, 14, and 17: transition period, prohibition on establishing old enterprise forms, classification of business entities, associations of legal entities, and transition rules. Official text of Law No. 4196-IX

• Civil Code of Ukraine dated January 16, 2003, No. 435-IV — Articles 50–52, 83–86, 113, 119–139, and 325–327: Sole Proprietorship status, types of entrepreneurial companies, general and limited partnerships, and rights of private, state, and municipal ownership. Official text of the Civil Code of Ukraine

• Law of Ukraine «On Limited and Additional Liability Companies» dated February 6, 2018, No. 2275-VIII — Articles 2–4, 10–15, and 56: company and member liability, establishment, charter, authorized capital, and additional liability companies. Official text of Law No. 2275-VIII

• Law of Ukraine «On Joint-Stock Companies» dated July 27, 2022, No. 2465-IX — Articles 3–8: JSC status, shareholders, private and public JSCs, and single-shareholder companies. Official text of Law No. 2465-IX

• Law of Ukraine «On Accounting and Financial Reporting in Ukraine» dated July 16, 1999, No. 996-XIV — Article 2: criteria for micro, small, medium, and large enterprises for financial reporting purposes. Official text of Law No. 996-XIV

• Law of Ukraine «On State Registration of Legal Entities, Individual Entrepreneurs, and Public Associations» dated May 15, 2003, No. 755-IV — Articles 9, 15, and 17: Unified State Register information, document requirements, and state registration of legal entities. Official text of Law No. 755-IV

• Law of Ukraine «On Farming Enterprises» dated June 19, 2003, No. 973-IV — Articles 1–8 and other special provisions concerning the establishment and operation of farming enterprises. Official text of Law No. 973-IV

• Law of Ukraine «On Licensing Types of Economic Activity» dated March 2, 2015, No. 222-VIII — Articles 3 and 7: licensing principles and the list of economic activities subject to licensing. Official text of Law No. 222-VIII

• Law of Ukraine «On the Use of Registrars of Settlement Transactions in Trade, Catering, and Services» dated July 6, 1995, No. 265/95-VR — Articles 2, 3, 9, and 10: settlement transactions, use of ECR/PECR, and statutory exemptions. Official text of Law No. 265/95-VR

• Tax Code of Ukraine dated December 2, 2010, No. 2755-VI — taxation rules for legal entities and Sole Proprietorships, the simplified tax system, VAT, and other tax obligations. Official text of the Tax Code of Ukraine

• State Property Fund of Ukraine — Information on the Transformation of State-Owned Enterprises into Business Companies: official decisions on transforming enterprises into LLCs and JSCs as part of the reform. Official website of the State Property Fund of Ukraine