Types of enterprises in Ukraine

An enterprise is a structure or organization that carries out economic activities, for example, produces goods or provides services to make a profit. They may differ in size, form of ownership, and mode of operation depending on the specific area of the economy.

Features of an enterprise

• a clear organizational structure that includes different departments and their functional responsibilities;

• established production of goods or provision of services to meet consumer demand;

• making a profit from the sale of goods or services at a price higher than production costs.

Main types of enterprises in Ukraine

Ukrainian enterprises are classified by various criteria, including:

• method of establishment,

• organizational and legal form,

• size,

• form of ownership, etc.

✅ Types of enterprises by form of ownership

Collective: based on collective ownership, meaning the members of the workforce are the owners.

Private: companies established by legal entities or individuals that independently bear all risks in business operations.

Municipal: owned by a specific territorial community within which the economic activity is carried out.

State: operate in areas defined by applicable legislation and are state-owned.

✅ Enterprises with mixed ownership

Such a business entity may combine different forms of ownership, for example, cooperative, collective, state, or private. It may also be partially owned by foreign holdings and large corporations.

An enterprise can be established based on the combined property of different owners, including citizens and legal entities. In this case, it will be called “joint” with a mixed form of ownership.

Types of enterprises by organizational structure

1. Joint-stock companies (JSC): large enterprises with charter capital in the form of shares. Owners have equal rights and obligations. The sale of shares allows attracting significant investments.

2. General partnerships: all participants conduct joint business activities and share equal responsibility. If obligations are not fulfilled, they risk all their property, covering debts with both contributions and personal property.

3. Limited liability companies (LLC): often chosen by medium and large businesses. Each participant contributes to the general fund and is liable only within the limits of their contribution.

4. Additional liability companies: participants are liable within their contributions to the joint capital, with an additional specified debt coverage limit.

5. Full partnerships: all participants share equal responsibility for the obligations of the organization.

6. Farming enterprises: suitable for agricultural activities.

Types of enterprises by size

1. Large: may employ over 250 workers, have specific income and asset volumes, with annual income exceeding 50 million euros at the NBU exchange rate. Various organizational and legal forms are possible.

2. Medium: 50 to 250 employees, annual income up to 50 million euros, and asset value not exceeding 20 million euros.

3. Small: up to 50 employees, annual income up to 10 million euros, with any form of ownership.

4. Microenterprise: up to 10 employees, with annual income not exceeding 2 million euros.

Types of business associations

1. Cooperatives: participants unite for joint economic activities and receive cooperative membership.

2. Corporations: several enterprises unite to conduct joint business and achieve goals.

3. Associations: enterprises unite to coordinate activities, forming unions or alliances with common business goals.

4. Concerns: enterprises connected by production and economic goals unite for combined income.

5. Consortia: enterprises unite temporarily for specific projects.

The types and organizational forms of enterprises are defined by the ECU (Article 63).

Types of activities of enterprises

Business entities may have the following activities:

• production: factories, plants;

• service provision: law firms, hair salons, restaurants, bars;

• processing: factories processing raw materials;

• mining: companies extracting minerals;

• intermediary activities: delivery and courier services;

• financial activities: banks, microfinance organizations;

• agriculture: agro-companies, farms;

• insurance: insurance companies.

Private enterprise and Sole Proprietorship: what is the difference?

In Ukraine, an enterprise can only be a legal entity. It has the right to conduct business, maintain a bank account, balance, property, charter, seal, etc.

Sole Proprietorship is not an enterprise. A Sole Proprietorship is an individual who has the right to conduct business but cannot register as a separate organizational structure.

A Sole Proprietorship and a Private Enterprise (PE) are also different. A PE can only be a legal entity with specific legal status, established by one or more persons, with liability limited to its charter capital. Unlike a Sole Proprietorship, a Private Enterprise has a more complex management structure, mandatory legal address, and more complex accounting.

How to find out the ownership form of an enterprise?

To find out the ownership form of an enterprise, you need to refer to the Unified State Register (USR). All information is publicly available. Enter the company name or its EDRPOU code in the search window.

How to choose the type of enterprise for your business?

To correctly choose the type of enterprise for your business, consider the following:

• evaluate production volume and company scale;

• clarify the number of founders if planning to work with partners;

• understand the level and method of liability for the enterprise's debts;

• consider tax consequences and SFS requirements for the operation of a specific type of business.

These are the key aspects to consider when choosing the form of business activity.