On last April 9, 2014, the European Commission submitted a proposal for a directive aimed at standardising the laws, regulations and administrative provisions, in the Member States, relating to single-member limited liability companies for which adopts the common label Societas Unius Personae and refers to as "SUP".
The proposal is part of the measures to reduce the costs of business activities in Europe and to improve the access to finance for small and medium enterprises ("SME").
Should it be approved the directive proposal will require the provision of SUP companies in the legislation of all Member State, i.e., companies with a single-member, with limited liability to the subscribed share capital and with full legal personality.
In order to reduce the administrative costs of incorporation of the SUP, it is foreseen that the Member States shall ensure that the registration procedure of these entities may be completed electronically, and the registration shall not be conditioned to any license or authorisation.
An SUP shall only issue one share, and shall not own, directly or indirectly, its single share. Where in accordance with the applicable national law, a single share is owned by more than one person, those persons shall continue to be regarded as one member in relation to the SUP. In such cases a representative shall be nominated to exercise their corporate rights.
Regarding the share capital, the SUP share capital shall be at least € 1 (one euro), and the Member States shall not impose rules requiring the company to build up legal reserves, notwithstanding the companies can foresee reserves in its articles of association.
In order for the distribution of assets to the company’s single-member it is required, on the one hand, that the net assets, due to the distribution, does not become lower than the amount of the share capital plus the reserves foreseen in the articles of association, and on the other hand that the management body certifies in writing that the SUP will be able to pay its debts as they fall due in the normal course of business in the year following the date of the proposed distribution (“solvency statement”). The solvency statement, signed by the management body, shall be disclosed.
The directors and the sole member shall be personally liable, respectively, for recommending or ordering the distribution if they knew, or, in view of the circumstances, ought to have known that such distribution did not comply with the legal provisions.
The SUP will be managed by one or more directors, as foreseen in the articles of association, appointed by the single-member. The single-member shall have the right to give instructions to the directors. The instructions will not be binding if they violate the articles of association or mandatory legal provisions.
The proposal presents an innovative regime on certain issues, with emphasis on the new provisions regarding distributions to the single-member, which through the establishment of the solvency statement follows the recommendations of several authors who have, in the last decade, criticized the European regime on this matter. Possibly this directive, should it be approved, could originate a new European regime for the distribution of results in all companies.