12,12,88 C^fficial]ournal of the European Communities ^oC^18^9 
Opinion on the proposal foratwelfth Council L^irective on company law concerning single 
member prrvatehm^tedcompames(^ 
(88BC^18^4) 
C^n lOjune 1988 the Council decided to consult the Economic and Social Committee, 
under Article 54 of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The section for Industrie, commerce, crafts and services,which was responsible for preparing 
the Committee^sworl^ on the subject, adopted its Opinion on l^]uly!988 (rapporteur Air 
Speirs), 
At its 258th plenary session (meeting of 28 September 1988) the Economic and Social 
Committee adopted the following Opinion unanimously with5abstentions. 
The Committee welcomes the Commission^sproposal 
subject to the following reservations' 
1, Ceneral comments 
1.1.1, The Committee is in favour ofthe basic ob^ec 
tive of the Commissions proposal which is to provide 
the sole trader with the option of setting up an organza 
tional structure which enables him to limit his liability 
for debtsmcurredinthe pursuance of hisbusinessby 
distinguishing between his private possessions and his 
company^sassets, promoting the spirit of enterprise by 
permitting the access of individual entrepreneurs to the 
status of company will, provided protection of third 
parties is ensured, represent an appropriate framework 
for business developmentandemployment growth in 
the internal market, 
1.1.2, In the Committees Opinion on the action 
programme for Small and mediumsi^ed enterprises 
(SAiE) it was proposed that ta^ systems be set up that 
favourareduction in succession dutiesfor SAIL,The 
implementation of the present proposal should be a 
step towards this end, 
1,2, The legal technique used by the Commission is 
to limit single member companies as far as possible to 
natural persons but allow single member companies for 
legal persons under certain more stringent circum 
stances, 
1.2.1, The Committee agrees with this approach but 
does not feel that the setting ofamimmum capital level 
should be left tomdividualAiemberStates^discretion 
in the cases where the single member is allowed to be 
alegal person, 
1.2.2, The Committee is of the opinion that the 
Commission, given the wide divergence in the levels of 
minimum capital in the Aiember States, should under 
tal^eaharmomBationinthis area in order to set upa system sufficiently capable of guaranteeing obligations 
to third parties. The sum must not, however,be such 
thatentrepreneursmthe SAIL sector will have undue 
difficulty in meeting this requirement, 
1,2,^, Civen the increasing number and importance 
of private limited companies and the fact that such 
harmonization has already been undertaken for public 
limited compames,the Committee considers such har 
mom^ation to be essential in order to avoid distortions 
of competition and, indeed, circumvention of the Eoirec 
tive. 
1,^, The Committee feels that the proposal could 
serve asauseful option in the Commumty^sefforts to 
encourage the creation and development of SAiE, 
1,^,1, The Committee invites the Commission, how 
ever,toundertal^eall necessary efforts to ensure,insofar 
as this is not mandatory, the^^c^o mutual recog 
nition at Community level ofoneperson limited com 
panics established in accordance with the proposal. 
1,4 The Committee cannot help but support the 
Commission^sattempt to bring the legal realities in the 
Community in line with economic ones in which one 
person companies already e^ist^^ro with front men 
as proforma partners, the present proposal should do 
away with this unnecessary e^tra cost and complication 
of runmngasmall company. 
1,^, The Committee is of the opinion that the inter 
ests of thirdparties are appropriately safeguarded in 
the proposal throughthe application of thelOirectives 
on disclosure, on annual accounts, consolidated 
accounts, approval of auditors, etc It would have lilted 
however tosee the directapplicabihty of thesefoirec 
tives stipulated directly in the body of articles itself 
instead of Austin the recitals. 
^oie^eiB^Bt^^to 1,^, Theimplementationof thefo^ectivemustnot 
encroach on worl^ers^e^isting right 
No C 318/10 Official Journal of the European Communities 12. 12. 88 
2. Specific comments 
2.1. Article 2 (2) 
2.1.1. The commentary on this provision indicates 
that the purpose of this Article is to prevent the creation 
of inextricable chains of compagnies. However, in those 
Member States which already permit single-member 
companies and have no rules on this matter (Nether­
lands, Denmark and Germany), the problem of 'inextri­
cable chains' has in practice turned out to be not as 
bad as might be expected. 
2.1.2. It may also be pointed out that if someone is 
really determined to set up an inextricable chain of this 
sort, it is not necessary for them to be the sole member 
of various companies; they can achieve the same end 
by means of shareholdings and subsidiaries. 
2.1.3. If the reason for the provision is a fear of 
'abuse' of such set-ups, a better way of countering this 
would be specific measures such as, for instance, the 
abuse legislation in certain Member States. 
2.1.4. Furthermore, it is not clear what the conse­
quences will be of infringing the prohibition. In the 
interests of legal certainty, the Commission should pre­
scribe a penalty or, as in the case of Article 4, lay down 
in the relevant commentary that it is left to the Member 
States to make provision for the penalties which seem 
appropriate to them. 
2.2. Article 2 (3) (a) 
2.2.1. Under this provision the legal person has 
unlimited liability for the company's obligations on 
the sole ground that they are the only member. The 
Committee agrees with this provision, but asks the 
Commission to redraft the Article to make it clear that 
the liability of the legal person only extends to his 
business assets. 
2.3. Article 2 (3) (b) 
2.3.1. This clause lays down the requirement of a 
minimum capital. A minimum capital is already 
required for public limited companies at Community 
level under Directive 77/91/EEC. (*) This Directive 
however does not apply to private limited companies. 
In most Member States a certain minimum capital is, 
however, already prescribed for private limited com­
panies. The sums vary greatly however. The Committee 
therefore invites the Commission to lay down a har-
(') OJNo L26, 31. 1. 1977, p. 1-13. monized specific minimum sum required as minimum 
capital for the setting-up of a single-member company. 
The sum must not, however, be such that entrepreneurs 
in the SME sector will have undue difficulty in meeting 
this requirement. 
2.4. Article 4 
2.4.1. With a view to greater transparency and as an 
aid to enforcement, the right of interested parties to 
have access to minutes and other documentation should 
be specifically stated. 
2.5. Article 5 (1) 
2.5.1. This provision relates to agreements between 
the company and the shareholder. Since conflicts of 
interest could arise here, a certain measure of trans­
parency is necessary as far as these agreements are 
concerned, and the requirement that the agreements 
must be in writing can be endorsed. 
2.5.2. It is, however, unclear what the consequences 
of failure to comply with this formal requirement will 
be. In the interests of legal certainty it would be desir­
able for the Commission to prescribe a penalty or, as 
in the case of Article 4, to lay down in the relevant 
commentary that it is left to the Member States to make 
provision for whatever penalties seem appropriate. 
2.6. Article 6 
2.6.1. The present wording of this Article is unclear. 
The Commission is invited to redraft this Article in 
accordance with the specific commentary in its explana­
tory memorandum. 
3. Conclusion 
In principle the proposed directive is acceptable to the 
Committee. However the attention of the Commission 
is directed to the following points: 
3.1. The Commission should attempt to harmonize 
the levels of minimum capital which such companies 
should have so that to some extent obligations to third 
parties can be guaranteed. 
3.2. Steps should be taken to ensure that the rights 
which employees normally enjoy when employed by a 
company are not jeopardized by the establishment of 
this type of enterprise. 
33. The Directive should be promoted as offering 
yet another option available to encourage the spirit of 
enterprise among SME. 
3.4. So that the interests of third parties may be 
appropriately safeguarded an article should be incor­
porated in the body of the Directive making it clear 
that other Company Directives such as those relating 
12. 12. 88 Official Journal of the European Communities No C 318/11 
to annual accounts, approval of auditors etc. apply also 
to single member companies. 
Done at Brussels, 28 September 1988. 
1. General comments 
1.1. Organization of the transport market is a pre­
requisite for introducing a transport policy. Coordi­
nation and harmonization of criteria for admission to 
the occupation of carrier will enable operators to exer­
cise their right of establishment and freedom to provide 
services. 
Common rules need to be introduced for national and 
international transport, in order to upgrade trans­
porters' qualifications. 
(') OJNoC 102, 16.4. 1988, p. 6. 3.5. The maximum degree of transparency in 
relation to the activities of such companies is desirable. 
The Chairman 
of the Economic and Social Committee 
Alfons MARGOT 
This will make for a healthier market and improve the 
quality of services to the benefit of road safety, users, 
transporters and the economy as a whole. 
1.2. The ESC reaffirms its support for Council 
measures to secure progressive harmonization and 
improvement of the terms of competition. In view of 
the uneven implementation of Directives in this field, 
the Committee endorses the thrust of the proposed 
amendments but would stress that harmonization must 
be brought about by raising, and not lowering, stan­
dards. Opinion on the proposal for a Council Directive amending: 
— Directive 74/561/EEC on admission to the occupation of road haulage operator in national 
and international transport operations, 
— Directive 74/562/EEC on admission to the occupation of road passenger transport 
operator in national and international transport operations, and 
— Directive 77/796/EEC aiming at the mutual recognition of diplomas, certificates and 
other evidence of formal qualifications for goods haulage operators and road passenger 
transport operators, including measures intended to encourage these operators effectively 
to exercise their right to freedom of establishment (l) 
(88/C 318/05) 
On 24 March 1988 the Council decided to consult the Economic and Social Committee, 
under Article 75 of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The section for transport and communications, which was responsible for preparing the 
Committee's work on the subject, adopted its Opinion on 20 July 1988 (rapporteur: Mr Rene 
Bleser). 
At its 258th plenary session (meeting of 29 September 1988), the Economic and Social 
Committee adopted the following Opinion by a large majority, with 3 dissenting votes and 
9 abstentions.