Legal Status of Business Entities: A Functional Model

Abstract

Abstract

Abstract. The research problem is determined by the transformation of the regulatory framework governing the legal status of business entities following the repeal of the Commercial Code of Ukraine and the transition to a dispersed model of legal regulation based on the provisions of the Civil Code of Ukraine, Law No. 4196-IX, and special legislation. Under these conditions, there is a need for a systematic reconsideration of the relationship between economic legal personality, competence, specific rights and obligations, restrictions, legal liability, and safeguards for the protection of business entities. The purpose of the study is to substantiate a functional model of the legal status of a business entity suitable for identifying its structure, sources of formation, and the specific features of its modification under special legal regimes, primarily martial law. The study is based on the hypothesis that the coherence of a business entity's legal status is ensured through the interaction of five functional levels: the basic commercial-law level, the organisational and property level, the functional and sectoral level, the special public-law level, and the regime-based level. The methodological framework comprises formal legal, system-structural, functional, and comparative legal methods, which were used to analyse Ukrainian legislation, scholarly approaches to economic legal personality and competence, and the functional concept of an economic entity in European Union law. The results of the study demonstrate that the legal status of a business entity is a broader category than economic legal personality, competence, and organisational and legal form. It has been established that, following the repeal of the Commercial Code of Ukraine, the body of legal norms governing the legal position of business entities retained its functional coherence despite being dispersed among several legal acts. The proposed functional model enables distinguishing relatively stable characteristics of legal status from its sectoral, special, and temporary regime-based modifications and identifying the sources of its individual elements. A criterion has been formulated according to which legal status encompasses only regulatory provisions, individual legal acts, and legal facts that directly determine the possibility of conducting economic activity, the scope of rights and obligations, the limits of legal liability, or safeguards for legal protection. It is concluded that martial law does not create a separate type of economic legal personality but temporarily modifies the existing legal status of a business entity by giving rise to additional obligations, restricting property and organisational autonomy, and altering certain procedures. At the same time, such modification does not eliminate the requirements of legality, necessity, and proportionality of interference, nor does it remove the guarantees of administrative or judicial review and compensation in cases provided for by law. The practical significance of the proposed model lies in its applicability to the systematic analysis of the legal status of different categories of business entities under both ordinary and special legal regimes.