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Publication date: 20.05.2024
Transfer of a business entity: new rules in Ukrainian legislation
One of the key components of the country's economic life is the transfer of ownership and management of enterprises, organizations and institutions. Recent changes in the Labor Code of Ukraine introduced new regulations regarding this process, defining the so-called "transfer of a business entity". These changes became an important step in the development of Ukrainian business and increasing its efficiency, however, they also caused certain questions and ambiguities.
The essence of the transfer of the business entity
Transfer of a business entity is defined as the transfer of ownership or control over an enterprise, institution or organization from one entity to another. This process can take many forms, including a change of ownership, reorganization or change of owner/user of the property that is the object of business.
Three transmission situations
After updating the Code of Labor Laws, the transfer of a business entity now covers three main situations:
Change of ownership: this is the transfer of ownership of an enterprise, institution or organization from one owner to another.
Reorganization: It is a process including a merger, merger, division or conversion of a business, institution or organization.
Change of property owner/user: this is the transfer of ownership or rights of use of property used in economic activity between different economic entities.
Practical challenges and questions
The new norm raises certain practical issues, in particular, in the definition of the "organized group of resources" behind the transferred economic entity.This can be particularly difficult in the case of a small business transfer, where resources may be limited and not properly organized. You may be interested in the following articles: lawyer advice, lawyer advice, document analysis, legal situation analysis, written advice, document review by a lawyer, lawyers documents, lawyer's help online, lawyer online, legal opinion, lawyer's legal opinion, lawyer online.
Also important is the definition of "preservation of the type of economic activity", which can be understood as the preservation of the same types of activity according to the Classification of types of economic activity, or in a broader sense. This can cause ambiguities and controversial issues in the practical application of legislation.
Consequences of the transfer of business for employment contracts
The changes provide that in the event of the transfer of the business entity, the employment relationship of the employees will continue with the acquirer. The rights and obligations under the employment contracts that existed between the employees and the alienator are transferred to the acquirer. Under certain conditions, this norm is perhaps the most controversial in the Amendments.
Conclusion
The transfer of a business entity is an important element of the economic life of the country, which can have a significant impact on enterprises, their employees and the economy as a whole. The new rules introduced into the legislation define and regulate this process, but they also pose some practical challenges and require careful consideration and interpretation for their effective application.
