MANAGEMENT OF MUNICIPAL PROPERTY OBJECTS OF TERRITORIAL COMMUNITIES: INNOVATIONS AND PROBLEMS OF THE TRANSITION PERIOD

Abstract

Introduction. Ukraine’s chosen path toward membership in the European Union necessitates the alignment of Ukrainian legislation with European standards, including the transformation of the regulatory framework governing the operation of economic entities. The repeal of the Commercial Code of Ukraine in August 2025 constituted a significant step in this direction. The proposed approach to the functioning of business entities in Ukraine has fundamentally altered the concept of managing assets owned by the state and territorial communities, generating considerable public debate within Ukrainian society. Accordingly, addressing the issues arising from this reform in the sphere of local economic governance—particularly those associated with the introduction of new forms of management of public-law legal entities and municipal property, including during the transitional period—has become a matter of particular importance for territorial communities and the local self-government bodies that represent their interests.

Purpose. The purpose of this article is to identify the challenges associated with the implementation of a new concept for the management of municipally owned assets within territorial communities following the repeal of the Commercial Code of Ukraine, and to determine potential approaches for addressing and resolving these challenge.

Materials and methods. The materials used in this study include: (1) legislative and regulatory acts related to the management of municipally owned assets; (2) statistical data on legal entities registered in Ukraine under the organizational and legal form of an enterprise; and (3) scholarly works addressing the management of state-owned and municipal property.

The following research methods were employed in the course of the study: statistical methods (to analyze the number of legal entities operating under the organizational and legal form of an enterprise and their respective categories); methods of theoretical generalization and graphical presentation of results (to analyze and characterize the processes of assigning municipal property to public-law legal entities under the relevant property rights regime); methods of analysis, synthesis, induction, and deduction (to examine the challenges associated with the management of municipally owned assets during the transitional period following the repeal of the Commercial Code of Ukraine); and the method of logical generalization (to formulate the study’s conclusions).

Results. The article examines the impact of the repeal of the Economic Code of Ukraine on the efficiency of public administration bodies and municipal sector entities. It clarifies the specific features of the transition period for legal entities of public law based on municipal property at the level of territorial communities. The study provides a comparative analysis of the procedures for assigning municipal property to entities established by a territorial community, as well as the rights to use it before the introduction of the new concept of municipal property management, during the transition period, and after its completion. The main risks and potential consequences of reforming the management sphere of municipal property objects of territorial communities are formulated. An improved mechanism is proposed for granting the right to use municipal property to legal entities based on the municipal form of ownership during the transition period. This mechanism accounts for reorganization procedures regarding the transformation of municipal enterprises into other organizational and legal forms of business, which will ensure their efficient and stable functioning and secure the legal status of the property they acquire. The main problems related to the introduction of legislative innovations concerning the transition to new organizational and legal forms of business and property management in the municipal sector of the local economy are summarized and systematized. The prospects for further research are identified in terms of studying foreign experience in the corporatization of municipal enterprises and the introduction of usufruct on municipal property, as well as its adaptation for Ukrainian communities.

Prospects. The prospects for further research consist in identifying directions and mechanisms for resolving the challenges faced by municipal enterprises in connection with their corporatization resulting from the introduction of a new concept of municipal property management and the assignment of municipal assets to legal entities under different rights of use. In order to adapt Ukrainian legislation to European standards and ensure a smooth transition period, it is necessary to examine international experience in the corporatization of municipal-sector legal entities, as well as the effectiveness of the use of municipal assets under the conditions of newly introduced forms of economic organization.