Exploring the Vagueness and Ambiguity of Ethiopian Law on the Formation of One Member Company in Ethiopia: How and Who is Eligible to Form One Member Company under Ethiopian Law?

Abstract

One Member private limited company was practiced for a long time in the other jurisdiction of the world but it introduced as novel commercial vehicle to Ethiopia in the amended Ethiopian commercial law of 2021.The introduction of this type of company’s opens up new vistas of business opportunities particularly for sole proprietorships and entrepreneurs who can enjoy the advantages of limited liability, and the benefit of separate legal entity as well. The Amendment of half century commercial code of Ethiopia is sensible and indispensable one to conform to global trends and realities in the business world today. The focus this article is to deal with the formation of One Member Company and to explore the vagueness and obscurity of the Ethiopian commercial law which related to the membership of legal person in one member private limited company, qualification of nominee, remuneration of Nominee and other issues related to the conversion of one Member Company to the other companies in Ethiopian law.

Keywords: One member company, Nominee, Conversion, director, Single person, legal person, remuneration, member

DOI: 10.7176/PPAR/14-1-04

Publication date: January 31^st 2024