Abolition of the commercial code of Ukraine: potential consequences and necessary prerequisites

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Abolition of the commercial code of Ukraine: potential consequences and necessary prerequisites

Nataliia S. Kuznietsova, National Academy of Legal Sciences of Ukraine, Kyiv Regional; Oleksii O. Kot, Andrii B. Hryniak, Department of Private Law Issues; Mariana D. Pleniuk, Sector of Contract Law Issues Research Institute of Private Law and Entrepreneurship named after Academician F.G. Burchak of the National Academy of Legal Sciences of Ukraine

Анотація

Ключові слова: Цивільний кодекс України, правові принципи, приватноправові відносини, кодифікація, рекодифікація, підприємницькі відносини.

Abstract

The paper analyses the provisions of the Commercial Code of Ukraine, comparing them with certain provisions of the Civil Code of Ukraine and separate laws and other regulations. Considering the need to align Ukrainian legislation with the legislation of the European Union countries in legislation regarding the establishment and operation of partnerships, corporate governance, protection of shareholders, creditors and other interested parties, regarding the further development of corporate governance policy in accordance with international standards, including the gradual approximation to the rules and recommendations of the European Union in this area, it is concluded that it is advisable to abolish the Commercial Code of Ukraine by adopting the relevant law, which stipulates all necessary measures to ensure proper legal regulation of relations for the period of preparation of the relevant systemic changes to the Civil Code of Ukraine.

Introduction

The adoption of the Civil Code of Ukraine and the Commercial Code of Ukraine in 2003 Civil Code of Ukraine. (2003, January).; Economic Code of Ukraine. (2003, January)., which came into force on January 1, 2004, marked a new era of development of the national legal system under the conditions of artificially created dualism of private law. An analysis of the fifteen years of experience of applying the provisions of the Civil Code of Ukraine and the Commercial Code of Ukraine, as well as the scientific discussions that have been ongoing since the very beginning of the draft of the Civil Code of Ukraine, the judicial practice of dispute resolution, give grounds to conclude that there are systematic contradictions between the provisions of these codified acts, in particular concerning the basic principles of regulation of business activity, legal entities, substantive and binding legal relations, etc., which significantly impede the economic development of our country, in particular the development of legislation in line with the provisions of the Association Agreement between Ukraine and the European Union.

In view of its fundamental principles, the Commercial Code of Ukraine substantially limits the development and functioning of market relations in Ukraine, since the very nature and methods of regulating business law have historically been aimed at ensuring the functioning of the planned economy of the Soviet state. From a formal legal standpoint, the existence of general provisions in the Commercial Code of Ukraine makes it impossible to qualify this code, in accordance with Part 2 of Art. 4 of the Civil Code of Ukraine, as an act of civil legislation that regulates entrepreneurial (in the terminology of the Commercial Code of Ukraine - the so-called "business") relations.

It should be Individually noted that most of the provisions of the Commercial Code of Ukraine (as will be proved below) are blanket or referential at best, which reason to argue about the insignificant effect of the Commercial Code of Ukraine (as against the rules contained in special laws) on regulation of public relations, in particular entrepreneurial ones.

The depth and extent of the contradictions between the Civil Code of Ukraine and the Commercial Code of Ukraine suggests that these conflicts can only be eliminated by abolishing the Commercial Code of Ukraine. Under the abolition of the Commercial Code, the authors of the paper understand the recognition of it as invalid. The corresponding draft law No. 2635 was registered in the Verkhovna Rada of Ukraine on December 19, 2019.

Considering the above, the purpose of this paper is to identify potential consequences and to establish the necessary prerequisites for the abolition of the Commercial Code of Ukraine in pursuance of the Resolution of the Cabinet of Ministers of Ukraine № 650 dated 17.07.2019 “On Creation of a Task Force on the Recodification (Updating) of the Civil Legislation of Ukraine”.

1. Materials and methods

The research methodology is conditioned by its purpose and lies in the analysis of the corresponding provisions of the Commercial Code of Ukraine (its structural parts - sections, chapters, paragraphs, separate articles, etc.) for the occurrence of negative consequences or legal vacuum in the regulation of entrepreneurial relations in case of abolition of the Commercial Code of Ukraine. For the purpose of writing this paper, the legal and regulatory framework included the Civil Code of Ukraine, the Commercial Code of Ukraine, the Land Code of Ukraine, the Water Code of Ukraine, the Forest Code of Ukraine, and the Subsoil Code of Ukraine, as well as other regulations, including the Law of Ukraine “On Joint Stock Companies”¹, the Law of Ukraine “On Securities and Stock Market” Law of Ukraine “On Joint Stock Companies”. (2008, September). Law of Ukraine “On Securities and Stock Market”. (2006, February). , the Law of Ukraine “On Environmental Protection” Law of Ukraine “On Environmental Protection”. (1991, June). etc. The paper uses general scientific and special legal methods of scientific knowledge. The main method is comparative law, which allowed to identify and analyse the duplication of legal provisions by the Commercial Code of Ukraine, which are contained in other regulations, including the Civil Code of Ukraine.

The historical law method allowed to investigate the stages of the establishment, adoption, and development of regulations. Philosophical and functional methods allowed to outline the prerequisites for developing an effective mechanism for the legal regulation of relations and to identify the interrelation between the preconditions for their emergence. The dialectical method of cognition accompanied the entire process of scientific research and allowed to consider the tendencies of development and improvement of the Ukrainian civil legislation in the context of European integration. Formal law method is applied in the analysis of legal rules governing legal relations and practices of their application.

Among other methods of researching the aforementioned issues, a simulation method was used, which provided an opportunity to consider the scientific and legislative problem of improving the civil legislation and, accordingly, the abolition of the Commercial Code, as an organized and purposeful goal that serves to improve the Ukrainian legislation. The presented scientific ideas of the authors in the context of the modern development of civil relations include targeted, methodological, substantive, institutional, and resultative components.

commercial civil code property

2. Results and discussion

2.1 General characteristics of the Commercial Code of Ukraine and its main drawbacks

The debate over the ways in which the legal rules governing relations in economic turnover should be organized have been ongoing for more than a decade and its fiery has not diminished over time. It received a new impetus during the last large-scale codification in Ukraine. Back in 2002, the authors of the textbook "Commercial Law" stated with unprecedented optimism that the main branch-related codification act in economic relations should be the commercial code, which would consolidate the unity of the subject, the general principles and directions of business and legal regulation and thus should become a backbone act [1].

Representatives of commercial law science had high hopes for the Commercial Code, because they viewed it as a pivotal act that would determine the basic "rules of the game" for all participants of economic turnover [2]. At the same time, even before the entry into force of simultaneously adopted and inharmonius Civil Code and Commercial Code, civilists had warned of probable issues that awaited not only lawyers but also the entire entrepreneurial environment [3].

Even then, the Commercial Code of Ukraine caused an avalanche of criticism from opponents: "The pillars of the code and many other "components" were made during the first five-year plans (economic competence, forms of property, branch management of the national economy) and in the 1960s (the right of economic management, the right of operational management, forms of ownership, enterprise funds, the owner of the enterprise, industrial goods, consumer goods). The "youth" is represented by the monstrosities that saw the light in the early 1990s as a result of desperate attempts to oppose the old Soviet instruments of managing the administrative economy by the new economic realities of semi- and quarter-market Ukrainian reforms (state, communal, private, leased enterprises).

The developers of the Commercial Code gripped the legacy of the socialist past with a bulldog determination, either intentionally or otherwise trying to squeeze the Ukrainian economy into a Procrustean bed of bankrupt concepts [4]. We shall note that the developers of the Commercial Code of Ukraine and its supporters have largely manipulated the unawareness of most Ukrainian entrepreneurs at the time and the assurance that in civilized Europe, along with the conventional Civil Code, there is another one, which governs the stream of commerce - the Commercial Code, for example, in Germany, France..

I.V. Spasybo-Fatieieva fairly points out that the comparison of the adoption of the Civil Code and the Commercial Code in Ukraine with the codification experience of other countries, which our codified acts attempt to emulate, is not always appropriate. This applies to the statement that in many countries there are commercial or trade codes and therefore the adoption of the Commercial Code of Ukraine is a natural step in the European legal framework. Apart from being untrue, this statement contains a misrepresentation of the Commercial Code of Ukraine as something similar to commercial or trade legislation of other countries [5]. Analysing the experience of legislative development of Eastern European countries, Ye.O. Sukhanov points out some important general tendencies which, among other things, extend to Western European states. Firstly, this refers to a substantial reduction of legal systems that maintain a separate regulation of civil and commercial law. Secondly, in reducing the scope of agreement-based regulation that is enforced by trade law (in those countries where it is preserved as a national feature of their rule of law), its "corporate part" comes to the fore. Thirdly, the commercial codes that are in force in European states (both the classic codes of the 19th century and the modern codifications of Bulgaria, Lithuania, or the draft Slovak Trade Code) remain private law acts, which systematize a certain (rather small) part of private law institutions and represent commercial law as "special private law", which is generally subordinated to the action of civil law as "general private law" [6].

Despite the fact that over the years since the Commercial Code of Ukraine came into force it has been massively ousted by acts of special legislation, its proponents do not give up the hope of delaying its complete disintegration, making every effort to demonstrate its ability to “survive” in the legislative orbit". At the same time, the experiment, which began in Ukraine in 2003-2004, not only did not reveal any advantages of the implemented codification of economic legislation, but quite the contrary - confirmed that the only correct and logically consistent way is the incorporation of commercial legislation according to its main areas: stock, investment, competition, banking, insurance, corporate, bankruptcy, etc. [7].

One of the developers of the Civil Code of Ukraine, A.S. Dovhert points out that civil law codification has become a significant achievement of national legal thought in Ukraine and, undoubtedly, the most significant step towards democratic transformation in the country. The Code confidently steers relations towards the market and civil society, even though it was doomed to act in the environment of the non-market and opposing Commercial Code of Ukraine [8-10]. Therefore, it is no coincidence that the updating of the Civil Code of Ukraine and its recodification cannot be a complete, logical, effective tool without abolishing this "vestige" of the administrative-totalitarian system - the Commercial Code of Ukraine. To assess the consequences and identify potential risks of cancellation of the Commercial Code of Ukraine, the provisions of the Commercial Code of Ukraine were consistently analysed and compared with the corresponding provisions of the Civil Code of Ukraine, other codes and laws of Ukraine. Considering the limited volume of the scientific article, only the main conclusions and results of the study are given.

Thus, the analysis of Section I of the Commercial Code of Ukraine Economic Code of Ukraine. (2003, January). "Basic Principles of Business Activity", which includes 4 chapters and 54 articles, gives reason to believe that its provisions by their nature create a certain attribute of the Commercial Code as a codified regulation, which should include certain general provisions. However, the analysis of articles included, for example, in Chapter 1 of the Commercial Code of Ukraine, suggests that they do not substantially comply with the principles of free entrepreneurial activity, market principles of economic development of Ukraine, in particular those enshrined in Art. 42 of the Constitution of Ukraine Constitution of Ukraine. (1996, June).. The same applies to the provisions of Chapter 2, "Main Directions and Forms of State and Local Government Participation in the Economic Sector", which are purely declarative in nature and are intended to outline the potential fields of influence of the state and local governments on entrepreneurial relations. At the same time, in view of the fact that according to Part 2 of Art. 19 of the Constitution of Ukraine, the said influence of state and local self-government bodies is exercised solely on the basis, within the powers and in the manner prescribed by the Constitution and laws of Ukraine, the respective regulatory powers, as a rule, are stipulated by special legislation - Laws of Ukraine "On the Cabinet of Ministers of Ukraine", "On the Antimonopoly Committee of Ukraine", "On the State Property Fund of Ukraine", etc. Accordingly, the provisions of Chapter 2 of the Commercial Code of Ukraine are purely declaratory or referential and have no considerable regulatory effect on entrepreneurial relations.

A detailed analysis of Chapter 3 of the Commercial Code of Ukraine Economic Code of Ukraine. (2003, January). "Restriction of Monopoly and Protection of Business Entities and Consumers from Unfair Competition" also confirms the conclusion that this chapter is unable to ensure even a minimal level of regulatory influence on respective relations in competition law. This function is performed in full by specific laws. These are, above all, the Laws of Ukraine "On the Antimonopoly Committee of Ukraine" Law of Ukraine “On the Antimonopoly Committee of Ukraine”. (1993, November)., "On Protection of Economic Competition" Law of Ukraine “On Protection of Economic Competition”. (2001, January)., "On Protection against Unfair Competition" Law of Ukraine “On Protection against Unfair Competition”. (1996, June)., etc.

A similar conclusion is reached in the analysis of Chapters 4 and 5 of the Commercial Code of Ukraine Economic Code of Ukraine. (2003, January)., which lack the truly meaningful principles of regulation of entrepreneurship in Ukraine. Instead, the provisions of these chapters are either declaratory or refer to an indefinite scope of legislative acts that should regulate the so-called "commercial business" and "non-commercial business" activities. Art. 49 of the Commercial Code of Ukraine deserves special mention, it introduces the term "foreign entrepreneurs" into Ukrainian legislation, and at the same time fails to define it.

Against this background, and given the minimum substantive and regulatory load of articles included in Section I “General Provisions'' of the Commercial Code of Ukraine, it is reasonable to conclude that there are no adverse effects in the abolition of the articles included in this section (Articles 1-54 of the Commercial Code of Ukraine). Furthermore, the abolition of Section I of the Commercial Code of Ukraine can take place without significant risks to the legal regulation of economic relations, given their minimal regulatory impact on entrepreneurial relations and considering the detailed regulation of these relations in the Civil Code of Ukraine.

Section II "Business entities" also incites serious remarks. It is known that in the Civil Code of Ukraine Civil Code of Ukraine. (2003, January). Retrieved from https://zakon.rada.gov.ua/laws/show/435-15 the concept of legal entities originally proceeded from the approaches existing in the European private law concerning the types and legal forms of legal entities. As Professor A.S. Dovhert points out on this matter, "maintaining an existing system of" enterprises" in Ukraine (identifying an enterprise with a legal entity is a fatal error) will only prolong economic stagnation".

The concept of legal entities enshrined in the Civil Code of Ukraine is as follows. Legal entities are the subjects of relations, these legal structures provide for the separation of property, which may occur with or without the unification of persons (Art. 81 of the Civil Code of Ukraine). Approaches to differentiation of legal forms in Civil Code of Ukraine are quite simple and clear:

- if the property is separated with the association of persons, this refers to companies (entrepreneurial and non-entrepreneurial);

- if property is separated without an association of persons, these are institutions and their founders do not take part in the management of these institutions (Art. 83 of the Civil Code of Ukraine).

In turn, entrepreneurial companies can be set up as business partnerships (joint stock partnerships; limited or additional liability partnerships; unlimited partnerships; limited partnerships) or as production cooperatives (Art. 84 of the Civil Code of Ukraine). In its draft prepared by the developers, the Civil Code of Ukraine did not envisage the possibility of other legal forms [11]. However, given the simultaneous adoption of the Civil Code of Ukraine and the Commercial Code of Ukraine in 2003, Art. 83 of the Civil Code of Ukraine defined the list of legal forms of legal entities as open. In the doctrine of civil law prevails the position that separated property can be held by a legal entity only on an ownership basis. Such subject as a non-owner legal entity should not exist in the economic environment. The retention of such organizations in Ukraine contradicts the nature and designation of legal entities in society [12]. And this is quite logical since legal entities in property turnover are responsible for their obligations with their own property.

Management of any legal entity is carried out in accordance with the rules established by Articles 97-103 of the Civil Code of Ukraine. Such transparency in relation to the management of a legal entity, according to the developers of the draft of the Civil Code of Ukraine is one of the main guarantees of protecting the rights of all subjects of economic turnover.

The Civil Code of Ukraine also regulates the issue of state involvement in civil relations. As these relations in the conditions of a market economy with the participation of the state are relations of private law, the state therefore must act in these relations not with the combination of its political and economic functions or as some special subject of law, as it was in times of a planned administrative system of management, but in legal forms that are adequate to these relations. The state (as well as territorial communities, the Autonomous Republic of Crimea) takes part in these relations as a legal entity governed by public law (Articles 81-82 of the Civil Code of Ukraine). Unlike other public law entities, important aspects of the legal status of the state, the Autonomous Republic of Crimea, territorial communities are directly defined in articles 167-176 of the Civil Code of Ukraine [12]. Considering the commitments made by Ukraine pursuant to the Association Agreement with the European Union (hereinafter referred to as the EU) in the areas of legislation on the establishment and operation of partnerships, corporate governance, with a view to creating a fully functioning market economy and stimulating trade, Ukraine and the EU have agreed to cooperate in particular to protect the rights of shareholders, creditors, and other interested parties in line with EU requirements in this area; on the further development of corporate governance policy in line with international standards, as well as the progressive approximation of EU rules and recommendations in this area.

At the same time, the regulation of legal entities (so-called "business entities") in the Commercial Code of Ukraine corresponds neither to the concept of legal entities reflected in the Civil Code of Ukraine nor to the common EU practices and standards in this field. In such circumstances, it is advisable to harmonize the legislation of Ukraine in this respect with the European approaches to the regulation of the institution of a legal entity, with consideration of the general provisions of the Civil Code of Ukraine and certain special laws adopted by the Verkhovna Rada of Ukraine after their entry into force, in particular the Laws of Ukraine "On Joint Stock Partnerships" Law of Ukraine “On Joint Stock Partnerships”. (2008, September). , "On Limited Liability and Additional Liability Partnerships" Law of Ukraine “On Limited and Additional Liability Partnerships”. (2018, February). , etc.

The issue of the fate of legal entities that currently operate in legal forms that are not stipulated by the Civil Code of Ukraine is fully justified in this situation - this refers, above all, to enterprises as subjects of law (state and municipal enterprises, so-called "collective ownership enterprises", private enterprises, enterprises with foreign investments, etc.) and their unions (associations, corporations, consortia, groups, etc.). Back in the day, the Ukrainian legal system has already faced a similar issue. With the adoption of the Law of Ukraine “On Joint Stock Partnerships” in 2008, the types of joint stock partnerships were changed - at the time, the law separated public joint stock partnerships and private joint stock partnerships. Pursuant to the transitional provisions of this law, a period of 2 years was established for companies created before its adoption to bring their articles of association into conformity with the provisions of the law. It should be reminded that there were more than 30 thousand joint stock partnerships at the time.

According to the State Statistics Service of Ukraine, as of October 1, 2019, there are 1,354,069 registered legal entities in Ukraine, of which 3,745 are state-owned enterprises, 32 are public enterprises for operational management of public property, and 14,018 are municipal enterprises. The figures for the unions of enterprises are similar: 553 associations, 79 corporations, 185 consortia, 317 concerns, 741 unions of consumer cooperatives. There are, according to the State Statistics Service, "other" unnamed unions of legal entities, of which there are 619 more units [13]. It is considered that a mechanism for establishing a certain transitional period for the harmonization of legal forms of legal entities in accordance with the Civil Code of Ukraine should also be proposed in case of abolition of the Commercial Code of Ukraine.

In terms of the structure of Section II "Business Entities" of the Commercial Code of Ukraine Economic Code of Ukraine. (2003, January). , it consists of 7 chapters and at the time of adoption there were 88 articles, a wide array of which was eliminated over time. Obviously, the provisions contained in these articles are declaratory provisions devoid of any regulatory influence. This, in particular, can be exemplified by Art. 59 of the Commercial Code of Ukraine "Termination of a Business Entity", which consists of one sentence: "Termination of a business entity is carried out in accordance with the law". It is clear that the abolition of this rule, as well as of other provisions of this section, will have no negative consequences for the legal regulation of activity and termination of legal entities.

We cannot ignore Chapter 7 of the Commercial Code of Ukraine (Articles 62-72 of the Commercial Code of Ukraine), which covers the enterprise as a subject of law and has caused many conflicts in domestic legal regulation. As mentioned earlier, the existence of an enterprise as a subject of law contradicts not only the provisions of the Civil Code, but also the obligations assumed by our state under the Association Agreement between Ukraine and the EU. The parallel existence of the category "enterprise" in the Ukrainian legal framework both as a subject of law and as an object of law (see, in particular, Art. 191 of the Civil Code of Ukraine) has created ambiguity and confusion in the legal regulation of entrepreneurial relations. Obviously, the enterprise as a subject of law entered into the Commercial Code of Ukraine precisely to justify the possibility of existence of state, municipal, and other types of enterprises. These are, in particular, state and municipal unitary enterprises, state commercial enterprises, public enterprises for operational management of public property (Chapter 8 Commercial Code of Ukraine, Articles 73-78), the so-called "collective ownerhsip enterprises" (Articles 93-112 of the Commercial Code of Ukraine). The Commercial Code of Ukraine includes in this concept production cooperatives, consumer cooperatives, enterprises of public and religious organizations, other enterprises envisaged by law. The Commercial Code of Ukraine also mentions private enterprises and other types of enterprises (Articles 113-117 of the Commercial Code of Ukraine).

In addition, Chapter 12 (Articles 118-127 of the Commercial Code of Ukraine) establishes the right of enterprises to unite with other enterprises to coordinate their industrial, scientific, and other activities in order to solve common economic and social problems. However, instead of determining that the union of enterprises as legal entities is excercised by means of creating of a certain business partnership, Articles 119-120 of the Commercial Code of Ukraine state that, depending on the procedure of establishment, the business unions may be formed as economic unions or as a state or municipal economic unions. With that, business unions are formed as associations, corporations, consortia, concerns, and other unions of enterprises envisaged by law. Art. 127 of the Commercial Code of Ukraine goes further and states that the law may determine other forms of joining the interests of enterprises (alliances, unions, associations of entrepreneurs, etc.), not stipulated in Art. 120 of the Commercial Code of Ukraine. We shall draw attention to the fact that it is no longer a matter of uniting enterprises, but of "joining the interests of enterprises".

Particularly noteworthy is the regulation of the creation and operation of business partnerships in the Commercial Code of Ukraine - this issue is addressed in 12 articles of the Code (Chapter 8 of the Commercial Code of Ukraine, Articles 79-90 of the Commercial Code of Ukraine). As already noted, the Commercial Code is characterized by a blanket method of regulation, when the text of the Commercial Code of Ukraine includes declaratory provisions devoid of regulatory influence, which do not even refer to a specific regulation, but simply indicate that the issue is regulated (or should be regulated) by law. The provisions of Chapter 8 of the Commercial Code of Ukraine are no exception. Thus, Part 1 of Art. 79 states that the procedure of creation and the order of activity of certain types of business partnerships is regulated by law. The rest of the provisions duplicate the corresponding provisions of the Civil Code of Ukraine and special laws - "On Joint Stock Partnerships", "On Limited and Additional Liability Partnerships". The lion's share of this chapter is occupied by Art. 90 of the Commercial Code of Ukraine "Accounting and Reporting of a Business Partnership". It should be reminded that the Law of Ukraine "On Accounting and Financial Reporting in Ukraine"¹ covers the issues of accounting and reporting of legal entities. In such circumstances, an attempt to regulate these relations with a single Art. of the Commercial Code of Ukraine is undoubtedly not the best solution from the standpoint of lawmaking technique.

Thus, the analysis of the provisions of Section II of the Commercial Code of Ukraine, which deals with the regulation of the legal position of economic entities, gives reason to conclude that there is a wide arrat of systematic contradictions between the provisions of the Commercial Code of Ukraine and the Civil Code of Ukraine, and the EU-Ukraine Association Agreement. In such circumstances, it is considered appropriate to eliminate these contradictions by abolishing the corresponding provisions of the Commercial Code and at the same time defining a transition period to bring the legal forms of existing legal entities in conformity with the provisions of the Civil Code of Ukraine.

2.2 Features of regulation of property fundamentals of management in accordance with the Economic Code of Ukraine

Section III of the Commercial Code of Ukraine Law of Ukraine “On Accounting and Financial Reporting in Ukraine”. (1999, July). Economic Code of Ukraine. (2003, January). , which begins with Chapter 14, "Property of Business Entities", covers the regulation of the property fundamentals of business. It is based on an understanding of property rights that is enshrined in Book 3, "Property Rights and Other Real Rights" of the Civil Code of Ukraine. However, the provisions of Art. 136 ("Right of Economic Management") and Art. 137 ("Right of Operational Management") of the Commercial Code of Ukraine in fact reflect the regulation of property relations, which was inherent in a controlled economy, when the property was transferred to the legal entity (as a rule, state-owned or municipal enterprise) not into ownership, but on titles, which constituted some kind of a substitute, an ersatz. A legal entity to which property was provided under the right of economic management or the right of operational management could not freely manage it or operate it under its obligations.

As stated in one of the comments to the Commercial Code of Ukraine, “the right of economic management is one of the legal forms of exercising ownership. The right of economic management is remarkably similar to ownerhsip, but it cannot be equated with ownership... the right of economic management is a right that is dependent on ownership and is its derivative. The right of economic management is limited not only by law, but also by the prescriptions of the certificate of title, approved by the owner... The right of economic management... is understood as the real right of the business entity that owns, uses, and disposes of the property assigned to it by the owner (their authorized body), with limitation of the competence to dispose of certain types of property with the consent of the owner in cases stipulated by the Commercial Code of Ukraine and other laws” [13]. A similar approach is defined in the above commentary to the right of operational management, which is “a derivative, secondary right. It is even more restricted than the right of economic management, for example, by the purposes of the activity of the subject of this right, by the tasks of the owner, by the purpose of the property owned by it uner the right of operational management, the authority to dispose of the said property [13].

Considering the contemporary realities, it should be noted that the Ukrainian economy, in accordance with our commitments to the international community, must objectively comply with established global approaches not only regarding the legal forms of legal entities, but also regarding property relations. Thus, the provisions of the Civil Code of Ukraine not only regulate the property rights in detail (consolidating concepts, warranties, grounds for acquisition, transfer, termination, etc.), but also establish common approaches to the use of the property of another - this primarily refers to rent and trust management. It should be emphasized that the institution of property management, which has become one of the innovations of the Civil Code of Ukraine Civil Code of Ukraine. (2003, January)., is completely understandable for the developed economies and can fully perform the functions of the instrument of transfer of property by the owner (including the state) to legal entities of public law so as to exercise their respective functions. In other words, the institution of property management is capable of completely replacing the outdated Soviet vestiges, such as "right of economic management" and "right of operational management" [14-16].

If we analyse entrepreneurial companies, first of all, joint-stock partnerships and limited liability partnerships whose shares and corporate rights belong to the state - such companies should own the property right on the title understandable to all participants in the trade turnover. For these reasons, Art. 141 of the Commercial Code of Ukraine Economic Code of Ukraine. (2003, January). “Features of the Legal Regime of State Property in the Field of Business” can be abolished. The rest of the articles in Chapter 14 of the Commercial Code of Ukraine are either blanket or declarative, or they duplicate legal rules contained in special legislation and can therefore be abolished without any adverse effect on the legal regulation of property (real) relations in entrepreneurial activity.

A similar conclusion is reached upon the analysis of Chapter 15 "Use of Natural Resources in Management" of the Commercial Code of Ukraine, the provisions of which completely duplicate the provisions of the Constitution of Ukraine Constitution of Ukraine. (1996, June). , in particular of Art.

13, Part 3 of Art. 14, paragraph 5 of Part 1 of Art. 92, Art. 4 of the Law of Ukraine "On Environmental Protection" Law of Ukraine “On Environmental Protection”. (1991, June). , Articles 1, 3, 78 of the Land Code of Ukraine, Land Code of Ukraine. (2001, October). , as well as articles of the Water Code of Ukraine Water Code of Ukraine. (1995, June). , the Forest Code of Ukraine Forest Code of Ukraine. (1994, January). and the Subsoil Code of Ukraine Subsoil Code of Ukraine. (1994, July). . An example of this are the provisions of Art. 149 of the Commercial Code of Ukraine, which repeat Part 1 of Art. 38 and Art. 23 of the Law of Ukraine "On Environmental Protection" Law of Ukraine “On Environmental Protection”, op. cit., and Part 2 of the same Art. has no regulatory impact at all, including only the informative component. The same is observed in the analysis of the provisions of the following articles: Art. 150 of the Commercial Code of Ukraine (acquisition of land title together with water bodies, forests, perennial plantations thereon is regulated by Articles 56, 59, 79 of the Land Code of Ukraine; Art. 7 of the Law of Ukraine "On Farming" Law of Ukraine “On Farming”. (2003, June). ; the procedure for exercising this title is determined by Art. 51 of the Water Code of Ukraine, Art. 12 of the Forest Code of Ukraine, Articles 18, 23 of the Subsoil Code of Ukraine, Art. 4 of the Land Code of Ukraine Water Code of Ukraine. (1995, June); Forest Code of Ukraine. (1994, January); Subsoil Code of Ukraine. (1994, July).; Land Code of Ukraine. (2001, October). ; the procedure for granting land ownership is determined by Part 3 of Art. 14 of the Constitution of Ukraine Constitution of Ukraine. (1996, June).); Art. 151 of the Commercial Code of Ukraine (duplicates the provisions of Art. 2, Part 3 of Art. 38 of the Law of Ukraine "On Environmental Protection" Law of Ukraine “On Environmental Protection”, op. cit.. The implementation of economic activity is regulated in the Land, Water, Forest Codes of Ukraine, Subsoil Code of Ukraine and other regulations regarding the use of natural resources); Art. 152 Commercial Code of Ukraine (duplicates Articles 90, 95 of the Land Code of Ukraine; Art. 18 of the Law of Ukraine "On Farming"; Art. 7 of the Law of Ukraine "On Personal Farming" Law of Ukraine “On Farming”. (2003, June). ; Art. 153 Commercial Code of Ukraine refers to Articles 91, 96 of the Land Code of Ukraine, Art. 44 of the Water Code of Ukraine, Articles 14, 19, 20, 21 of the Forest Code of Ukraine, Art. 24 of the Subsoil Code of Ukraine, Art. 34 of the Law of Ukraine "On Fauna").

As a result, it should be noted that the provisions of Articles 148-153 of Chapter 15 “Use of Natural Resources in Management ” of the Commercial Code of Ukraine Economic Code of Ukraine. (2003, January). by their very nature, contain provisions referring to special regulations and are not of a regulatory nature. Accordingly, they can without exception be excluded as such that duplicate the provisions of special legislation [17]. Particular attention in this study should be given to the issues of the use of intellectual property rights in economic activity (Chapter 16 of the Commercial Code of Ukraine). An analysis of Chapter 16, “Use of Intellectual Property Rights in Economic Activity”, points to the conclusion on duplication of the provisions of the Civil Code of Ukraine¹, including the provisions of special regulations in this sector.

Provisions of Art. 154 of the Commercial Code of Ukraine are exemplary, which are of a blanket nature and for the most part are non-regulatory. They merely state that the provisions of the Civil Code of Ukraine shall be applied to govern such relations. The provisions of Art. 155 of the Commercial Code of Ukraine duplicate the provisions of Art. 420 of the Civil Code of Ukraine, which defines the list of intellectual property rights. Art. 156 of the Commercial Code of Ukraine also contains no substantive regulation, as it duplicates the provisions of Part 1 of Art. 462 of the Civil Code of Ukraine, Articles 7, 8 of the Law of Ukraine "On Protection of Rights to Industrial Designs"². Articles 8, 9 of the Law of Ukraine "On Protection of Rights to Inventions and Utility Models"³. Art. 157 of the Commercial Code of Ukraine duplicates the provisions of Part 1 of Art. 494 of the Civil Code of Ukraine, including Part 3 of Art. 5 of the Law of Ukraine “On Protection of Rights to Marks for Goods and Services”⁴. Art. 158 of the Commercial Code of Ukraine does not determine the specifics of legal regulation and is a reference to other regulations, and also partially duplicates Part 3 of Art. 16 of the Law of Ukraine "On Protection of Rights and Marks for Goods and Services", which gives grounds to claim that there is no actual influence of the Commercial Code of Ukraine rules on the regulation of such relations as against the rules contained in special regulations.

Thus, almost all of the provisions of Chapter 16, “Use of Intellectual Property Rights in Economic Activity” (except Articles 160, 161 of the Commercial Code of Ukraine), duplicate the provisions of the Civil Code of Ukraine, inclduing the provisions of special regulations and thus can be excluded as having no regulatory effect.

The analysis of Chapter 17 “Securities in Economic Activities” also shows that there is no independent regulatory influence, since the types of securities, their issue, sale, acquisition are governed by Art. 195 of the Civil Code of Ukraine, as well as the Law of Ukraine "On Joint Stock Partnerships"⁵, the Law of Ukraine "On Securities and the Stock Market"⁶, the Law of Ukraine "On the Circulation of Bills in Ukraine"⁷ and the Law of Ukraine "On the Depository System of Ukraine" Law of Ukraine “On the Depository System of Ukraine”. (2012, July). . As an example, we shall take Art. 164 of the Commercial Code of Ukraine, the provisions of which duplicate the provisions of the Law of Ukraine "On Securities and the Stock Market" Law of Ukraine “On Securities and Stock Market”. (2006, February). (Part 2, Art. 8 - regarding the prohibition of covering losses at the cost of the bonds of the enterprise; provisions of Art. 12 - regarding the concepts and general provisions concerning investment certificate); including the provisions of the Law of Ukraine “On Joint-Stock Partnerships” Law of Ukraine “On Joint Stock Partnerships”. (2008, September). (Part 5 of Art. 15; Part 2 of Art. 19 - regarding the special procedure for the use of shares to cover losses; Art. 13 - regarding the right of depositors to receive of the deposit and interest on it (savings (deposit) certificates after the specified term [17]. Features of the issue, circulation, and repurchase of securities, joint investment institutions are regulated in the Law of Ukraine “On Joint Investment Institutions” Law of Ukraine “On Joint Investment Institutions”. (2012, July). . Part 6 of Art. 164 of the Commercial Code of Ukraine contains no regulatory mechanisms. Financial activities of the states that created the real estate operations fund and attracted funds of individuals and legal entities are regulated by the Law of Ukraine "On Financial and Credit Mechanisms and Property Management in the Construction of Housing and Real Estate Transactions" Law of Ukraine “On Financial and Credit Mechanisms and Property Management in Housing and Real Estate Transactions”. (2003, June).. Part 7 of Art. 164 of the Commercial Code of Ukraine duplicates the provisions of Part 1 of Art. 14 of the Law of Ukraine "On Securities and the Stock Market" Op. cit., 2006.. The issue and circulation of securities is regulated by the Law of Ukraine "On Circulation of Bills in Ukraine" Law of Ukraine “On the Circulation of Bills in Ukraine”. (2001, April). and the Law of Ukraine "On Securities and the Stock Market" Law of Ukraine “On Securities and Stock Market”, op. cit.. Part 8 of Art. 164 of the Commercial Code of Ukraine is purely informative, has no regulatory effect, since the production of securities (or their forms) is regulated by the Law of Ukraine “On the National Bank of Ukraine” Law of Ukraine “On the National Bank of Ukraine”. (1999, May). . The same applies to other articles in this chapter.

The foregoing suggests that Chapter 17 "Securities in Economic Activities", namely Articles 163-166 of the Commercial Code of Ukraine Civil Code of Ukraine. (2003, January). can be removed without negative consequences, given their referential nature and lack of regulatory impact.

Chapter 18 “Corporate Rights and Corporate Relations”. Unlike the controversial regulation of corporations and corporate rights in the Commercial Code of Ukraine, the Civil Code of Ukraine does not contain the definition and regulation of corporate law and corporate relations. In its turn, the Commercial Code of Ukraine also does not address this issues, as it rather ambiguously defines the approach to defining corporate rights, since the provision of Art. 167 refers to “the rights of a person whose share is determined in the authorized capital (property) of a business organization”. It is known that the authorized capital is the value of the contributions of the shareholders (founders, participants) made for the purpose of forming its assets for the beginning or further activity, and also serves to guarantee the interests of creditors and debtors. In turn, property as a special object is considered to be a separate thing, a combination of things, including property rights and obligations (Part 1 of Art. 190 of the Civil Code of Ukraine). The above suggests that the approach of the Commercial Code of Ukraine to the identification of authorized capital and property of a business organization in the context of modern development of economic relations is unacceptable and creates obstacles in the cooperation of Ukrainian companies with foreign ones. Considering the best practices of the doctrine of private law, business organization should be understood as a generic concept, arising from the basic understanding of the legal entitiy as an organization.

The concept of "corporate relations", which are mentioned in paragraph 3 of Art. 167 Commercial Code of Ukraine, also does not add to the clarity, according to which "corporate relations are relations that arise, change, terminate in relation to corporate rights". Hence the misunderstanding: are the relations between business organizations and participants or the supervisory board and general meetings, etc. corporate?