2. According to Article 113 of the Code, a private enterprise is an enterprise operating
on the basis of the private property of one or more citizens, foreigners, stateless
persons and his/her labor or using hired labor. An enterprise operating on the basis of
the private property of a business entity - a legal entity - is also private. The procedure
for the organization and operation of private enterprises is determined by this Code
and other laws.
How private enterprises can be formed?
Private enterprises can be formed by the decision of the owner (owners) of the
property or the body authorized by him (them), and in cases specifically provided for
by the law, also by the decision of other bodies, organizations and citizens through
the establishment of a new one, reorganization (merger, merger, allocation , division,
transformation) of an active (active) economic entity in compliance with the
requirements of the legislation, in particular the anti-monopoly and competition
legislation.
What is private enterprise?
3. Types of private enterprises
Enterprises based on the ownership of property of
individual citizens are private. According to the Law of
Ukraine "On Property", the following three types of
private enterprises can be defined:
● an individual private enterprise based on the
private property and labor of one individual;
● family private enterprise based on private
property and labor of citizens who live together
as members of one family and run a joint
economy;
● a private enterprise with the right to hire labor,
based on the private property of an individual
citizen of Ukraine with the right to hire labor
4. The procedure of creating private
enterprise
First step: preparation for registration
● The person need to choose a name for future private enterprise. In addition to other features, it
must be unique, otherwise the registration of the enterprise will be refused.
● Next, it is necessary to determine the size of the statutory fund and its type (property, monetary or
mixed). Creating a PE may require opening a special bank account or drawing up additional
documentation for the property.
● The future PE will need a legal address. This can be the home address of one of the founders or
the address where the office is located.
● The creation of a private enterprise is impossible without its own charter. You can formulate its
provisions yourself or use a model charter. In case of independent creation, the charter must be
signed by all founders and notarized. Two copies of it will be required for state registration. At this
point, the preparatory stage can be considered complete.
5. The procedure of creating private
enterprise
Second step: submission of documentation
The future founder can make the decision to create a private enterprise at his own discretion. But in any
case, documents certifying the identity of the founder will be required.
For individuals it is:
● copy of passport;
● a copy of the identification number
For legal entities:
extract from the EDR;
power of attorney of the person authorized to perform registration;
for non-residents – a document confirming the fact of registration of a legal entity in their country
Attached to them are two copies of the charter, the decision to establish a private enterprise, and a
completed registration card. On the Internet, you can familiarize yourself with the rules for processing any
documents from this list. For example, a sample decision on the establishment of a private enterprise will
be very useful.
6. Types of structures of legal enterprises
1. Sole Proprietorship
A type of business entity that is owned and run by one individual – there is no legal distinction between
the owner and the business. Sole Proprietorships are the most common form of legal structure for small
private enterprises
● Formation: The sole proprietorship is the simplest way of doing business. The costs to create a sole
proprietorship are very low and very little formality is required.
2. General Partnership
An association between two or more people in business seeking a profit. Partnerships can be created with
little formality, but because more than one person is involved, a partnership agreement should be created..
● Formation: Usually easy to create, but it is important to have an attorney create the partnership
agreement. Partnership agreements establish the terms of the partnership and typically cover topics
such as:
3. Limited Liability Company (LLC)
A hybrid between a corporation, general partnership, and sole proprietorship. Owners of an
LLC are called members. Members may include individuals, corporations, other LLCs and
foreign entities. Most states permit an LLC with only one owner, called a “single member
LLC.”