After the Societas Privata Europaea (SPE) failed to be adopted as a uniform legal structure across Europe, the EU Commission recently provided a proposal for a single-member private limited liability company (Societas Unius Personae).

The EU Commission assumes that at present many companies, in particular small and medium-sized entities, face obstacles in their attempts to take up activities outside their place of registration, e.g. legal, cost, administrative or linguistic constraints and the lack of trust by customers and business partners in foreign companies.

The proposal for a Directive on single-member private limited liability companies tackles these obstacles as it would standardise requirements for the incorporation of companies with a single shareholder. It would remove the process of registering subsidiaries and make it easier for companies to operate across the EU.

Key elements of the proposal are the following:

• All Member States have to provide in their national legislation a company law form for single-member private limited liability companies with the same requirements across the EU and a common label called Societas Unius Personae (SUP).
• Member States are obliged to allow for direct online registration of an SUP, i.e. there is no specific requirement by the country of registration for applicants to attend in person or by proxy, if applicable, for registration purposes.
• A template of articles of association, which would be identical in all Member States and available in all EU languages, will be made available. This template will contain the necessary provisions to establish an SUP.
• A minimum share capital of € 1 is required.
• Creditors shall be protected through a balance sheet test and a solvency statement.

Dr Marco Zessel