© Yana FATEEVA, 2008

Private enterprise (ukr. - "приватне підприємство") –  is a type of enterprise, establishment and activity of which are provided in Economic Code of Ukraine.  So, art. 63 of the EC of Ukraine, among other types of enterprises, classified by form of property, speaks about private enterprise that acts on the grounds of private property of citizens or subject of management (legal entity).

A definition of private enterprise is contained in the article 113 of the EC of Ukraine. A private enterprise is an enterprise that acts on the grounds of private property  of one or more citizens, foreigners, stateless persons and his (their) labor or with usage of wage labor. A private enterprise is also such enterprise that acts on the grounds of private property of a subject of management – legal entity.

In such a way, legislation envisages possibility of establishment of enterprise by two and more natural persons.

Statutory fund can be formed by founders (owners) of private enterprise. Such possibility proceeds from the norm of art. 3 of the EC of Ukraine, according to which, depending on way of establishment (foundation) and formation of statutory capital there are two types of enterprises which act in Ukraine: unitary and corporate.

A private enterprise, the owners of which are some natural persons, is a corporate enterprise: according to part 4 of art. 63 of the EC of Ukraine, a corporate enterprise is established, as a rule, by two or more founders upon their joint decision (agreement) and acts on the grounds of consolidation of property and/or business or labor activity of founders (members), their joint disposal of business, on the grounds of corporate rights, including organs, created by them, participation of founders (owners) in distribution of profits and risks of enterprise. Corporate enterprises are also such enterprises, established on private property of two or more persons.

But, to our opinion, possibility of separation of statutory fund of private enterprise in shares, is not envisaged by law. According to art.80 of the EC of Ukraine, an enterprise that has statutory fund, separated in shares, which size is determined by constituent documents, is an economic company, named limited liability company.

Analogical norm is contained in the art. 113 of the Civil Code of Ukraine:  economic company is a legal entity, which statutory (formed) capital is divided into shares between members.

Thus, a legal entity, which statutory (formed) capital is divided into shares, is an economic company and can not be a private enterprise.

So to which type of common property does private enterprise that belongs to some natural persons, should be referred?  Article 355 of the Civil Code of Ukraine determines a notion and types of right of common property:

1. Property that is found in the ownership of two or more persons (co-owners), belongs to them on the right of common ownership (common property).

2. Property can belong to persons on the right of common equity ownership or common joint ownership.

According to art.  356 of the Civil Code of Ukraine, property of two or more persons with determination of shares of each person on the right of ownership is common equity ownership.   So, economic company (limited liability company) belongs to owners on the right of common equity ownership.

According to art. 368 of the Civil Code of Ukraine, common ownership of two or more persons without determination of shares of each of them in the ownership is common joint ownership. Naturally, as far as determination of shares of the owners in statutory fund of private enterprise is not based on the norm of law, it belongs to the owners on the right of common joint ownership.

Management of private enterprise, that is found in common joint ownership, should, obviously, have a range of significant distinctions from management of economic company, order of which is regulated in details by the Law of Ukraine “On economic companies” and the Civil Code of Ukraine. Thus, according to part 2, art.369 of the Civil Code of Ukraine, disposal of property  that is in common joint ownership, is carried out upon consent of all co-owners. Such norm, for example, means that in case of absence other order in the articles of Association of the enterprise, each co-owner has one vote in the superior managerial body irrespective from the order and way of statutory capital formation.  In other words, a person, who paid a major part of statutory fund, will not have a decisive vote in the superior managerial body of the enterprise.

Is it possible to define other rules of management of enterprise upon consent of the parties in the articles of association of the enterprise?  To our opinion, all questions connected with order of management of private enterprise, can be regulated by consent of founders (owners): article 6 of the Civil Code of Ukraine in its third part indicates that the parties in agreement can digress from provisions of acts of civil legislation and regulate their relations at their own discretion.

This norm of law gives to the founders of Эта норма закона дает учредителям частного private enterprise a possibility, apart from approval and signing of articles of association of enterprise, to conclude agreement that will regulate the order of management of enterprise, order of extermination of shares from enterprise in case of withdrawal of one of owners from owners, as well as the order of settlement of other questions or enterprise’s activity and interrelation of its co-owners.   At the same time, co-owners can receive equal number of votes in management of enterprise, equal size of shares in case of their apportionment and other.  Norms, analogical to the conditions of agreement, should certainly be contained in the articles of association of enterprise for avoidance of contradiction of norms of articles of association to the conditions of agreement between founders.

If the founders didn`t conclude an agreement, and articles of association of the enterprise provides separation of statutory fund into shares, it is possible to recognize such articles invalid in the part that concerns separation of statutory funds into shares in court order, or in whole with further cancellation of state registration.