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the one person company

the one person company

03-03-2020

On January 2018, the Egyptian president has issued a law no.4/2018, amending some rules of the companies' law no 159/1981; one of these amending was about recognizing a new form of the companies that are eligible under the Egyptian litigation system; which is "the one person company".


The one person company is essentially a limited liability company with a solo founder, whether national or foreigner, natural or juristic person, the founder is liable only with the amount of the capital of the company unless stated otherwise by the law; in addition that amendment has recognized establishing the company from the beginning with only one founder or partner, or transforming the company from a different type into the one person company whenever the multiple partners condition is not applied.  


The following is a brief outline the terms of establishing a one person company: 

What is the process of establishing the one person company?


The establishing process proceeding with the notification of the founder to the GAFI and the notification must contain the following documents:
1-    A  memorandum association of the one person company;
2-    The approval of the competent authorities, if the company activity requires such approval; 
3-    the approval shall be from the council of Ministries or the competent ministry In the case of establishing the company  by one of the general public persons;
4-    The receipt of payment with one out of thousandth, from the paid capital, at least 100 EGP and maximums of 1,000 EGP.
The required documents for forming the company, after the notification: 
1-    A none confusion certificate issued from the commercial registry;
2-    A banking certificate depositing the full capital;
3-    A copy of the national identification or the passport;
4-    A power of attorney;
5-    A security approval for the company's founder;
6-    A copy of the bar association card of the attorney;
7-    The certificate of the auditor of the company;
8-    A possession deed or the lease contract of the company's head quarter.  

How to determine the name of the company?


The company name shall be obtained from its purpose, or its founder name with a statement clarifies that it's a one person limited company. 

How much the capital should be?


The minimum of the capital is fifty thousand EGP; it shall be paid in advanced in full.

What are the allowed/ restricted activities?


The one person company can participate into the commercial, industrial,   professional activities.
On the other hand, restricted from:
1-    Insurance, banking and saving;
2-    Receiving deposits and investing money on behalf of others;
3-    Establishing another one person company;
4-    Issuing the prospectus either at establishing or increasing the capital;
5-    Dividing the capital shares into the negotiable ones.

When the one person company gains its legal capacity and what is the founder's liability limits?

It gains its legal capacity at the registration date in the commercial register.

The company responsibility is determined only by its capital, however that the founder responsibility turned into personality and unlimited in the following cases:
1-    At the assessment of the in- kind share value, the founder is responsible personally and unlimited to pay the difference between the actual and the estimated value;
2-    When compensating the damages to the company itself or others as a result of violation the obligation of due care that must be accomplished by him during the establishment process;
3-    If he was dissolute or suspend the activity of the company prior to its expiration date or accomplished its purpose.

How to manage the one person company?


The founder of the company has the right to be its manager, and he has all the authorities of the general assembly in the limited liabilities companies; however he has the right to appoint one manager or multiple managers complying with the limited liability companies' rules.

The cessation of the one person limited company:


The one person limited company may cessation in one of the following cases:
1-    If it has lost the half of its capital, unless the founder decided to continue its activity;
2-    The cassation of the juristic person the founder of the company;
3-    Incapacity of the owner;
4- The death of the owner, except for the case of a solo successor, or if the heirs decided to proceeded it in its legal form, having six months from the date of death in order to rectifying the legal status of the company in complying with the applicable rules.
 

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