They want to simplify the bankruptcy procedure for small business in Ukraine
The Verkhovna Rada supported in the first reading a bill that introduces a separate simplified bankruptcy procedure for micro and small businesses. The case is proposed to be completed within a maximum of 180 days, and the costs of court fees and the insolvency practitioner's remuneration are to be halved.
270 MPs voted for bill No. 15024 on September 16. The document was adopted as a basis with further elaboration for the second reading. The official card of the bill confirms that after the vote it is being prepared for the second reading.
Bankruptcy to be limited to 180 days
Currently, according to the assessment of the parliamentary Committee on Economic Development, bankruptcy procedures for small enterprises remain too complex, lengthy and expensive, which often makes their use economically disadvantageous for the business itself.
The bill provides for micro and small business entities a separate fast-track - a simplified procedure that should last no more than 180 days. At the same time, the costs of court fees and the insolvency practitioner's remuneration are proposed to be reduced by half.
Another change concerns disputes between the debtor and creditors. If the parties have no disagreements on the stated claims, the bill provides for fewer formal procedures so as not to delay the consideration of the case.
Simplified regime will not be available to everyone
To prevent the use of simplified bankruptcy for evading debts, the draft provides safeguards. If the court discovers signs of fictitious bankruptcy, asset stripping or wage arrears, the case must be transferred to the general bankruptcy procedure.
Thus, the shortened procedure is designed primarily for enterprises that have actually lost solvency and have no complex disputes with creditors.
The authors of the reform expect that cheaper and faster bankruptcy will allow entrepreneurs to close unviable businesses without multi-year procedures and the accumulation of new costs, and creditors to receive their funds faster.
Rules also change for state-owned enterprises
Bill No. 15024 concerns not only small business. It also changes the application of bankruptcy procedures to state-owned enterprises and business entities for which a privatization decision has already been made.
It provides for a clearer delineation of privatization and bankruptcy procedures so that state assets do not remain in an uncertain legal status for a long time. According to the authors' intention, such enterprises should either undergo a solvency restoration procedure or proceed to the sale of assets in the established manner.
Reform linked to Ukraine Facility
The document has European integration status. The proposed model is based on the provisions of EU Directive 2019/1023 on restructuring, insolvency and second chance for entrepreneurs. The relevant committee also calls the adoption of the changes part of Ukraine's commitments under the Ukraine Facility program.
At the same time, during the consideration of the bill, remarks were already made. The Main Scientific and Expert Department of the Rada recommended refining certain provisions, and the Budget Committee noted that the changes could affect revenues from privatization and court fees and require additional financing for the judicial system. That is why the relevant committee recommended adopting the document as a basis with subsequent refinement.
Before the current vote, the bill failed several times even to be included in the agenda: in April 163 deputies voted for it, in May - 192, in June - 195. On September 1, the document was finally included in the agenda of the current session, and on September 16 it passed the first reading.
Now the bill must be refined for the second reading. Therefore, the proposed deadlines, payment amounts and other parameters of the simplified procedure may still change before the final adoption of the law.
Based on materials: Verkhovna Rada, Committee on Economic Development
