On The Problems Of One Man Company

First, the concept and type of one person company.

As the name implies, it refers to a limited company (including a limited liability company and a limited liability company) whose shareholders (natural persons or legal persons) are only one person, and the shareholders hold all the capital contributions or shares of the company.

1 the classification of a one person company can be divided according to different standards: in terms of the true meaning of a one person company, there is a formal one person company and a real one person company.

The former refers to the company's capital contribution or share held only by a single shareholder, and the company has only one shareholder.

The latter refers to the fact that the number of shareholders in the company is plural, but in essence, there is only one "real shareholder" or "stockholder of equity interest" in the company, and the remaining shareholders are only to satisfy the legal requirements for the minimum number of shareholders of the company, or to be a nominal shareholder of certain shares for the sake of the real shareholders' interests.

The normally identities of nominal shareholders are trustees of real shareholders' contributions or shares.

In the form of a one person company, it can be classified from different angles.

1, when it comes to the formation time of a one person company, it is divided into the original one person company and the follow-up one person company.

2 the former refers to a company initiated by a shareholder and a one person company at the time of its establishment.

The latter refers to the number of shareholders and the plural of legal requirements when the company is established, but after the establishment of the company, the shares of the company are concentrated in one person due to the liquidity of the company's shares, and the number of shareholders is converted from the plural to the singular.

2, according to the shareholder status of a one person company, is divided into natural person one person company and legal person one person company.

A legal person company can also be divided into wholly state-owned company and non-state-owned legal person sole proprietorship company.

The sole proprietorship company is a one person company invested by a natural person. This is the most traditional one person company.

This form of company separates the investment from the owner and other personal property, and greatly reduces the investment risk with the help of the limited liability weapon, which is greatly favored by the business owners.

The sole proprietorship of a company is a wholly owned subsidiary of a parent company, which is owned by a legal entity or invested separately or acquired through the acquisition of a company's entire shares.

With the large number of large company groups emerging, more and more companies are wholly or wholly owned by legal persons.

In the company of one person, wholly state-owned companies can be listed in a single category.

It refers to a one person limited company invested solely by a state authorized investment institution or department.

The sixty-fourth company law of China stipulates this special legal person sole proprietorship company.

3 is divided into one person limited liability company and one person limited liability company, according to the different form of the company.

The size of the limited liability company is relatively small, most of which are small and medium-sized enterprises, and most of the companies, especially the primary one, belong to this type.

There are relatively few people in a limited liability company, and basically one of them is a one after another company.

According to the laws of individual countries, the original one person Limited by Share Ltd can be established, but the vast majority of countries do not allow the establishment of original joint-stock limited liability company.

The first and most typical case of the emergence of a one person company is the case of the Salome v. Salomon Company Limited in 1897 in Britain. Two.

This case marks the legal establishment of one person company: Salome has seven shareholders, namely Salome, wife and five sons.

The director of the company is Salom and his two sons.

After the company was founded, Salome sold a shoe store he owned for 38782 pounds to the company.

The company paid Salom 8782 in cash, and another 10000 as a debt owed by the company to Salome, which was issued by the company to 10000 pounds guaranteed by Salom, and the rest as the price of the shares subscribed by Salom.

The company actually issued 20007 shares, Salom owned 20001 shares, and the other six shares were held by their families in order to meet the requirements of seven promoters in the company law of the United Kingdom.

One year after the establishment of the company, the company was forced to disband. After liquidation, the company's debt exceeded the company's assets by 7773 pounds, so that the 10000 pound debt of rosam was cleared, and the creditors of other unsecured companies could not get any liquidation.

The unsecured creditor claims that Salome and the company are essentially one person.

Therefore, it is impossible for the company to owe Salome 10 thousand pound bonds, and the company's assets are used to liquidate the debts of creditors other than Salome.

The court of first instance held that the company was only an agent of Salome, so Salome should pay for the loss.

But this decision was rejected by the house of Lords.

The house of Lords believes that once registered, the company became an independent person who had nothing to do with Salom.

As such a creditor, he has the right to pay priority over unsecured creditors.

Salom finally made 6 thousand of what the company could pay, and the other creditors were not paid.

3 this case objectively confirms the legality of a one person company in the form of a precedent. As long as the company is established according to the law, the company obtains the corporate personality, regardless of whether the controlling power of the company is essentially a minority shareholder, so the one person company in essence is inevitable.

The precedent shows that investors can avoid the law by using nominal shareholders. Although such companies have many kinds of institutions, in essence, the nominal shareholders and these organizations are merely nominal. The company's property rights and management rights are entirely controlled by the shareholders with the most capital contributions.

Since the beginning of the Sarah case, the corporate legal person of one person has embarked on the road of legislation from the fact.

The above cases have always been considered as typical cases of recognizing one person company in the real sense.

The first thing to affirm the legal status of a one person company in the form of statute law is the natural person and company law, which was set up in 1925 by statenburger.

4 (two) the internal reasons for the existence of a one person company: 1, shareholders' limited liability is the internal driving force of a one person company. The limited liability system was initially granted to shareholders of a joint stock company to stimulate investment enthusiasm.

Once the limited liability system came out, it was immediately welcomed by all investors.

It is unfair for small and medium-sized enterprises to hold the limited liability system to hold the "preferential" for large investors to enjoy limited liability.

In 1892, Germany created a limited liability company through legislation, and solved the problem that the small and medium-sized enterprises could not apply the principle of limited liability. However, the following question was whether one person's investment could enjoy the preferential treatment of limited liability, which became a major problem that puzzled company legislation and company practice since twentieth Century.

With the development of modern market economy and high technology, the risk of human being engaged in economic activities is bigger and bigger. Any type of investors want to be protected by limited liability in economic activities, and individual entrepreneurs are no exception.

One person company can make the sole investor maximize the use of limited liability principle to avoid operational risk and maximize economic efficiency.

When a company law does not recognize the legality of a one person company, a single investor may set up a one person company in nominal terms to avoid the law.

It can be seen that the preference for limited liability is the internal cause of the one person company.

The change of 2 and the traditional internal checks and balances mechanism has provided a suitable soil for a one person company, because the establishment of the internal organization of the traditional company is based on the company's plural shareholders. The structural significance of the shareholders' meeting, board of directors and board of supervisors is that it is an independent business entity outside the contributor (the separation of ownership and management right).

However, in the actual operation of the company, the formalization of shareholders' Association is almost normal.

When the number of shareholders is small, shareholders (usually directors and managers) directly operate the enterprises, so that the statutory shareholders' meetings are of no practical significance.

In the large number of large shareholders, the majority of minority shareholders are indifferent to the management of the company. The shareholders' meeting becomes a mere formality and becomes a legitimate tool for large shareholders to manipulate the company.

Shareholders' Association is a mechanism that promotes the majority of shareholders' willingness to become the company's wishes, and can supervise the managers of the company. The failure of shareholders' meetings not only formalisms of "separation of ownership from management", but also makes the corporate society tend to weaken.

It is not surprising that a company does not have the characteristics of a society because it has no importance in the actual operation of the company.

The emergence of 3 and huge capital has laid a material foundation for the development of a one person company. Although the company system was first created to meet the needs of capital accumulation, with the application of the company system and the development of modern market economy, many enterprises with strong capital strength have been built up, and they have the ability to hold any enterprise.

In order to diversify investment risks and reduce disputes among plural shareholders, one man companies are often the best choice for them to achieve multiple industry portfolios and diversify investment risks.

Under the condition of 4 and high technology development, small and medium-sized enterprises have the economic foundation of building one person company. When the emerging industries of high technology and risk are constantly rising, the enterprises who enter these fields can win in the competition, which mainly depend on the advanced degree of advanced technology and the accurate grasp of investment opportunities, not the size and scale of capital.

The one person company has the characteristics of weak combination but prominent personality. It is the best form of organization that can be adopted in small and medium scale investment.

The above shows that since the modern market economy has the right soil to produce one person company, the law adopts the attitude of denying the one person company, not only can not suppress the existence of the one person company, but also can not effectively regulate one person company, and may even cause the contradiction and confusion between the theory and practice of company law, and aggravate the abuse tendency of one person company.

Therefore, Liechtenstein took the lead in legislating the recognition of a one person company in 1925. Many countries or regions have amended the company law or relevant laws in succession. First, they recognize the establishment of the latter company, and then recognize the legality of the establishment of one person company.

There are mainly four types of representativeness: one is the establishment of one person limited liability company and one person limited liability company, the most widely prescribed ones are the Liechtenstein, Canada, Holland, Germany and so on; two, only one person limited company is allowed, such as France, Denmark, Belgium and so on; three is the prohibition of the establishment of one person company, but when the company has only one shareholder left behind, the company does not require the company to be dissolved, and the shareholder does not have unlimited liability, such as Austria, Switzerland, etc. four is not allowed to set up a one person company. If the shares of the company belong to one hand, the company must immediately dissolve or require shareholders to bear joint and several liability, such as the United Kingdom, Greece, Italy, Spain and so on. (three) the legislation of one man company in the world is based on the legislation of one person company in the world.

5 the impact of the three or one person company on the traditional company legal theory (1) the reasonableness of the existence of the one person company is debated whether the rationality of the one person company in the concept of the company law is quite reasonable.

Scholars who hold the conclusion of the argument are as follows: (1) one person companies lack social nature.

6 the traditional company law insists that the essence of a company is a corporative legal person, and a corporate body is the main body of a person. At least 2 or more combinations can show its corporative nature so as to obtain the legal person qualification.

If the company's shareholders have only one person, then the company's Association is gone, and the company should be dissolved.

(2) one man company runs counter to the premise of the principle of limited liability.

The shareholders of a limited company, especially a limited liability company, enjoy privileges of limited liability because of their abandonment of direct control over the company's property, that is, "no control, no responsibility".

The sole shareholder company of a one person company usually operates directly in the company's business and actually controls the company completely, thus losing its base of enjoying limited liability. (3) to admit that one person company will make the traditional company law face a big conflict.

The main content of traditional company law is to adjust the relationship between shareholders and shareholders, between the company and shareholders, as well as the internal organization of the company. These provisions must be meaningful only when the shareholders are plural. In the case of one person company, the regulatory functions of these Provisions are virtually nominal.

7 (4) the development of one person companies will adversely affect the development of individual businesses.

Because the shareholders of a one person company can enjoy limited liability, it is inevitable that the sole proprietor will compete for the establishment of one person company, and abuse the company form and limited liability, resulting in a false name for the wholly foreign-owned enterprise, and unlimited liability exists in name only.

Moreover, compared with the sole proprietorship, the one person company is neglected by the enterprise credit.