The Supreme Court of Ukraine declared property of private entrepreneur as jointly belonging to the couple

On March 11, 2015 the Supreme Court of Ukraine by its ruling in the case No. 6-21цс15 found that private entrepreneur's property could belong to the couple and become subject to division if the couple divorces. Private entrepreneur's property that is used for business activity is considered to be joint spousal property, like any other property accumulated during the marriage, provided it was acquired using earning capacity of the couple.

Prior to that, the Constitutional Court of Ukraine by its decision of September 19, 2012 in the case No. 17-рп/2012 expressed a similar position as to the charter capital and assets of a private enterprise formed using joint spousal property. However, currently, there is no consistency in the courts: in similar cases court may declare private entrepreneur's property that is used for business activity to be either joint spousal property or individual ownership of a private entrepreneur.

Such court inconsistency creates: (i) serious risks of contesting any contract concluded by a private entrepreneur (as well as the owner of a private enterprise) without spouse consent; (ii) significantly complicates entrepreneurship by burdensome written spouse consent requirements and procedures, and (iii) in case of property division, creates risks for integrity of business as formed by a private entrepreneur. In view of the above, the legal regime of the spouses' property involving private entrepreneur as well as the owner of a private enterprise and the other spouse requires more clarity and consistency in approaches.

For further information please contact Asters' managing partner Oleksiy Didkovskiy
and associate Olga Lepikhina.

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