Comparative Single-Member Companies of Germany, France and England: A Recommendation to Ethiopia

Abstract

A single shareholder may establish a single-member company for a number of reasons. This unique business, among others, gives an opportunity to limit the sole shareholder's liability and it also provides an administrative simplicity to its establishment. Historically, as was the case in other countries,the Legislature in Germany, France and England generally were not ready to recognize a one-man corporation. The coming into effect of the 12th Company Law Directive, EC, 89/667/EEC, aimed principally at harmonization of company laws among members, changes the status qua and now one can easily witness the inclusion of such form of company in these countries. Ethiopia, a civil law country, allows two or more individuals to form a company and partnerships. As international investment and domestic trade grows domestically, the law recognizes two forms of companies-Private Limited Company and Share Company- and fail to provide a wider and happier business environment for stakeholders. Reviewing the Ethiopian Commercial Code of 1960 becomes imperative when one considers the advantages of a single-member company to investors, traders, and the country in general. This research focuses first on the meaning and its distinct characteristics,development, problems and legislative remedies and purposes of single-member companies. It will also dwell on how a one-man corporation is established, managed and generally regulated in Germany, France and England. The last part devoted to Ethiopian company law and recommendations.