The Verkhovna Rada adopted a law introducing a simplified bankruptcy procedure for micro and small enterprises. UNN reports this with reference to the Verkhovna Rada of Ukraine.
The new rules will allow entrepreneurs to settle debts more quickly, reduce the costs of insolvency proceedings, and obtain the opportunity to resume operations or officially close their businesses.
Details
On Wednesday, November 11, Parliament adopted in the second reading and as a whole Draft Law No. 15024 on simplified proceedings in bankruptcy cases for micro and small businesses. The decision was supported by 291 members of parliament.
The document provides for amendments to the Code of Ukraine on Bankruptcy Procedures and a number of other legislative acts. The main goal of the changes is to make insolvency proceedings more accessible to small enterprises that lack sufficient financial and organizational resources to undergo complex and lengthy court procedures. In particular, the changes reduce the bureaucratic burden, simplify the consideration of cases, and lower costs associated with bankruptcy.
During the preparation of the document for the second reading, the maximum duration of the simplified procedure was increased from 180 to 270 days. The possibility of extending it for the duration of appellate and cassation appeals was also provided. The new mechanism is expected to enable entrepreneurs to settle debts to creditors more quickly, restore solvency, or legally wind up their business activities.
At the same time, the law contains safeguards against abuse so that the simplified procedure can be used by bona fide entrepreneurs rather than debtors seeking to evade their financial obligations.
Certain provisions of the document regulate the specifics of applying bankruptcy procedures to state-owned enterprises and business companies with respect to which a decision on privatization has been adopted.
Context
The document is part of Ukraine's European integration reforms. Its provisions are based on the principles of EU Directive 2019/1023 and are aimed at fulfilling the state's obligations under the Ukraine Facility program. The implementation of the new rules is expected to facilitate the return of assets to economic circulation, improve payment discipline, and create conditions for restarting businesses.
Reminder
In 2023, President of Ukraine Volodymyr Zelenskyy signed a law (Reg. No. 7442) to simplify the bankruptcy procedure for businesses during martial law.