In light of the Government's calls for entrepreneurs to lead the economic recovery, the Department for Business Innovation and Skills (BIS) is to review whether the introduction of a new corporate form for single person businesses could save entrepreneurs costs in setting up and managing their business.
Companies House figures show that over 650,000 registered companies have only one shareholder-director and almost one million registered companies have only two shareholders and two directors.
At present, many one person limited companies face the same reporting requirements required of much larger companies. In addition, single person companies are faced with the prospect of having to comply with rules designed with the "traditional" concept of a company with multiple shareholders and directors in mind.
Proposals for a single person company could mean the introduction of a bespoke incorporation and management regime imposing lesser reporting and other formalities for those operating alone. Streamlined incorporation and lesser reporting requirements may coax the estimated three million or so unincorporated sole traders in the UK to make use of the benefits conferred by incorporation, not least those of limited liability and transferrable shares.
BIS's review and thoughts are presently in the very early stages, although, it has indicated that the main components of any potential legislation relating to this proposal could include limited liability, lesser disclosure requirements and restricted directors duties. A possible public consultation may be on the cards for Spring 2011.