Part IV
Luis Gutiérrez SANJUÁN, Ph.D. in Law, Professor – Law Faculty, University of Las Palmas Gran Canaria (Spain), Sole shareholder company. Comparative study
Sole traders have long been seeking for a legal type of organisation that would relieve them from personal liability for the company’s debts.
Their wish first materialized in 1980 in Germany, in a law that allowed sole proprietorship with limited responsibility, and then in Community Decision XII, which allowed for the extension to the Member states of this sui generis type of organisation, which so far had met with rejection and mistrust.
It was pressure from small and medium-sized enterprises that led to the creation of sole proprietorship, but this legal type of organisation turned out to be useful for major enterprises too, when they intended to separate the scope of their business (industrial from commercial) as well as for multinational companies seeking to establish a country-specific subsidiary.
The recognition given by the European Directive to this type of enterprise is important, because previously it had been impossible to set up such a business in many European countries.
Spanish company law, for instance, allowed the establishment of limited liability companies only if there were at least two associates and of public companies when there were at least three associates. Sole proprietorship was possible only if the shareholders sold their respective shares to the remaining shareholder, as the law did not specify the minimal number of associates required throughout the life of the company.
The European directive provides for two types of sole proprietorship: the original (established as such) and the derived (when a single associate, either an individual or a legal person, owns all the shares).
There are differences between the two in terms of establishment, publicity, limited liability; this paper addresses all of these aspects by comparing German law to Spanish law and examining the way in which the provisions of the European directive are reflected in national legislation.
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