Ukraine replaces state enterprises with JSCs, LLCs: Cabinet approves new rules

The Cabinet of Ministers approved new rules for restructuring state-owned enterprises at its September 8 meeting, under government decrees No. 102–1104. Within six months, all state enterprises must be converted into joint-stock companies (JSCs) or limited liability companies (LLCs) with 100% state ownership.

The choice of legal form — JSC or LLC — will be left to the enterprise’s founder.

Assets previously held under the right of economic management will be transferred to the authorized capital of the successor company. Meanwhile, non-privatizable assets and property under operational management will be granted to the new entities under the right of use without alienation.

Permits, licenses, and certificates will remain valid for the legal successors within their original terms. CEOs of the newly established companies will serve as interim heads until formally appointed under the new charters.

The resolution excludes companies already undergoing restructuring under previous procedures.

The government also recommended that local governments adopt a similar approach for municipal utilities.

• In early August, Danylo Hetmantsev, head of the Verkhovna Rada’s tax committee, noted that nearly three-quarters of state-owned enterprises are either inactive or "phantoms."