As directly insinuated by the name, these are companies that only have one person (the owner), also referred to as private limited liability companies. Single member companies is an idea that is still spreading to other parts of the developing world but established western nations such as the UK, have for a reasonable time put into place necessary conditions, mainly the right legal statutes to support the growth of the sector. For instance, under the English law, a company is defined as a form of body corporate or corporation, generally registered under the Companies Acts or other similar legislations. Putting into perspective the recent legal provisions of the European Union, no partnership or the addition of other members is allowed. However, based on the latest political maneuvers by Britain opting to divorce herself from the European Union, the perspective of single member limited liability companies in the country is destined to face certain changes. The European Union law on individual companies in the region affected the legislation that was adopted by Britain. The aim of this analysis is to present the current situation and problems of single member companies in the UK based on the recent political actions.
Limited liability companies or Societas Unius Personae (SUP) as the EU refers to them them have been functioning in the country through legislative rules that were recently being synchronized to match the requirements of the EU. Companies owned by a single person became authentic in the UK through the Companies Act of 2006 which provided the ultimatums that were to be followed during their creation and existence. As pointed out by analysts, UK is the only country with legislation that has put an emphasis on the designated quorum of limited liability companies. The quorum allows only one spot through natural or legal ownership. Unlike the sole proprietorship, owners of single member companies have comprehensive legal responsibilities they have to adhere to while carrying out their transactions.
Upon the failure of its initiative to promote the growth of private businesses in 2013, the EU had shifted its priorities to enable the smooth occurrence of single person enterprises in the region. The EUs perspective was to put in place a legislative process that allowed flexibility for citizens to set up new companies easily. Some of the new rules that had already been proposed by the organization included the ability of people within EUs member states to set up personal companies in any country through an online process. Such an advocation was dealt a significant blow through the recent Brexit referendum that was voted for by the majority in the country.
A lot of issues surrounding the fate of limited liability companies from a legal point of view are mainly influenced by the recent Brexit move. Despite there being other considerable factors and experts indicating that Brexit changes will not take place immediately, it is inevitable to avoid the overall change that is approaching. Currently, a person willing to start a single individual company in the UK has to put in perspective, various issues. Starting from the basic point of view, it is important to note that the withdrawal of the UK from the EU makes it hard for citizens from other European countries to set up their companies freely in the country. The reverse also remains true for UK owners of individual companies. Single organization owners have to begin embracing the reality that it will no longer be a sail through for them to sell their goods to the EU members duty free. The advantages of having access to a larger single market are going to become limited. Given the fact that the move was made recently, current company owners targeting a wider European market have not started experiencing the difference but the well laid out slow transitioning process will begin to affect them in the near future. The ability to have easy access to the market in the region is, therefore, one legal aspect that current owners of private limited liability companies in the country have to put into consideration. If the UK considers a complete detachment from the EU and is referred to as a third party country, significant changes in the entire industry have to be adopted, including the competition laws.
From a general perspective, much of the issues facing the sector of single member companies in the UK are mainly economically based. Unlike legal conditions, the economic factors such as meeting the required capital and operating with limited liability vary from time to time and are some of the common considerations people reflect on before moving ahead. From a legal point of view, single person companies are law indulging compared to the sole proprietorship. With necessary legal requirements remaining the same, some of the issues are slowly changing after the Brexit move became a reality in the country. With Brexit, certain aspects such as the general change of operating laws that were closely affiliated to the EU will have to change. This will in turn act as an obstacle to the premise of single person companies before matters revert to normal.
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