One person company (OPC)

Companies with diverse legal structures are the basis of economic and financial systems, as companies helps the economic and commercial growth in countries considering that the economic and financial conditions in many countries can be significantly impacted by the activities of these companies.

The diversification of investor needs and the nature of businesses has led to the appearance of multiple types of companies such as partnership companies, General Partnership companies and Joint Stock companies, relevantly this diversity allows investors to choose the type of company that suits the nature of their activity and the invested capital.

The Companies Law No. 159 of 1981 and its executive regulations and amendments thereto by Law No. 4 of 2018 regulates the nature and legal form of Joint Stock companies –partnership limited by shares -limited liability companies – One person companies.

The Definition and Legal Form of one person company

One person company is the latest type of company regulated in Law No. 4 of 2018 which allows any investor or person to establish a company on their own without the need for a partner, this represents an exception to the rule that at least two partners are required in order to establish a company, as stipulated in article 505 of the Egyptian Civil Code.

A single person, whether natural or legal can establish and manage one person company, whereas it is characterized by the financial assets of the owner of the company are completely separate from the financial assets of the company, relatedly he is liable towards third parties with the amount of the registered capital of the company, on the other hand the company is liable for any other obligations towards third parties.

The Egyptian Law No. 159 of 1981 and its amendments defines one person company as: “A company its capital is wholly owned by one person, whether natural or legal, within the limits of the purposes for which it was established. The founder of the company shall not be liable for its obligations except to the extent of the capital allocated.”

The concept of a one person company can be explained as an extension of limited liability companies, it combines the characteristics of General Partnership companies and Joint Stock companies, whereas it can be established and managed by any person, without liability for its debts from his own personal financial assets.

The conditions and procedures for establishing one person company

1. An application shall be submitted by the founder or his representative to the General Authority for Investment and Free zones.
2. The founder is one person, either natural or legal.
3. The one-person company is established bylaws- the Articles of Association – which includes the company’s name, purpose, the founder’s data, duration, the Company’s management, director’s name, the address the of headquarter and branches if any, its capital, the auditor’s name and address, the legal adviser’s name, the liquidation rules and any other data determined by the Executive Regulations of the Companies Law No. 159 of 1981 and its amendments.
4. One person company acquires its legal personality from the date of registration in the commercial register and registering the Article of Association in the Notary Public, any actions or contracts undertaken by the founder in the name of the company while it is under incorporation shall be binding on the company after its incorporation, if such actions are necessary for its incorporation.
5. The minimum capital of one person company is one thousand Egyptian pounds according to the amendments of the Companies Law, and the shares of the company cannot be tradable, and offer to public subscription either upon incorporation or increase of the capital.
6. One person company cannot issue or lending any type of securities, moreover, the company cannot carry out insurance business, receive deposits, savings, or invest funds for the benefits of others.
7. In the event that the founder of the company disposes of all or part of the capital to a natural or legal persons the founder shall undertake all the procedures of amending the company’s data and its annotation in the commercial register and to reconcile the legal status of the company in accordance with the Companies Law and the procedures.

Required documents for the one person company establishment

• Obtaining a certificate of non-confusion for the company name approved by the Commercial Register.
• A bank certificate stating the fully deposit of the company’s capital.
• A copy of the founder ‘s National Id for Egyptian or passport for foreigner.
• Power of attorney for the establishment of a one person company from the founder, whether a legal or natural person, in the event that the incorporation is requested to be completed through an attorney, The powers of attorney must include a stipulation entitling the attorney to incorporate and sign on the articles of incorporation before the Real Estate Registration and Notarization office.
• A copy of the Bar Association card of the lawyer who signs the articles of incorporation before the Bar Association; the cardholder must be at minimum a lawyer admitted before the Court of First Instance and the card must be valid up to date.
• The name and address of the company’s legal advisor, who must be a lawyer at least admitted before the Court of Appeal.
• A copy of the certificate or the acknowledgment of the acceptance of the Auditor’s appointment must be submitted.
• Security clearance of the foreign company owner or foreign manager.
• In the event of pumping in-kind shares upon incorporation: it would suffice to submit a report by professional experts, whose professions are regulated under the law and match the type(s) of the in-kind shares being evaluated.
• If the founder is a legal person, the following documents shall be submitted:

i. Power of attorney from the legal representative of the legal person.

ii. Recent commercial register of the legal person.