Q&As

What do I need to know about the European Commission's proposals for a single-member private company?

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Published on LexisPSL on 26/08/2014

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • What do I need to know about the European Commission's proposals for a single-member private company?
  • Why has the European Commission put forward the proposal?
  • Why is the Commission proposing a new form of single-member private company?
  • What are the key features of a single-member private company?
  • What will the legislative framework be for SUPs?
  • What next?

Following the withdrawal of the proposal for a European private company (SPE), the European Commission put forward a proposal for a Directive on single-member private limited companies in April 2014.

Why has the European Commission put forward the proposal?

The Commission believes that European businesses are not currently able to take full advantage of the opportunities offered by the single market. Setting up subsidiaries abroad is often burdensome and costly due to the divergent requirements of national legislation across the EU and the necessity of obtaining legal advice and translations.

The Commission aimed to address these problems in its 2008 proposal for a new SPE form, but it was not possible to obtain agreement on this new form of legal entity among member states and the proposal was withdrawn. The Commission's current proposal aims to address some of the obstacles faced by European businesses by introducing a common single-member private company form across the EU.

The main aims of the proposal are to:

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