Understanding the Challenges of Closing a Business
- No temporary business halt options for sole proprietors
- Official closure requires registration in the state registry
- Entrepreneurs must navigate operational status or formal shutdown
Ukrainian law does not allow sole proprietors (ФОП) to temporarily halt their business activities due to personal reasons such as illness, maternity leave, or traveling abroad, explains lawyer Mykhailo Ortinsky.
Legal Constraints
According to Ortinsky, a proprietor's status does not automatically freeze even in cases of no orders or inability to conduct business. The Ukrainian law of May 15, 2003, No. 755-IV outlines a single procedure for terminating activities, requiring official state registration. Until the closure details are recorded in the Unified State Register (ЄДР), the individual remains an active business entity. Consequently, entrepreneurs face two options: maintain their ФОП status without actual business operations or undergo the official termination process.