The key points of the draft are as follows:
• Any one person or juristic person can be a promoter and file an application to incorporate a limited company.
• There is no minimum par value.
• The single shareholder can hold a statutory meeting and pass resolutions, and hold an ordinary meeting or extraordinary general meeting and pass resolutions, without the need to call for a shareholders' meeting.
• The shareholder is not liable, directly or indirectly, for company debt with other persons solely on the basis of being the shareholder of the company (which is made clearer than as stated in the CCC).
• For any transaction between the company and the shareholder that is not the normal business of the company, the director shall cause such transaction to be made in writing andrecord all agreements in the minutes of the directors' meeting (a new good governance measure).
• If the company's sales volume or income does not reach the criteria set in the ministerial regulations, the company may not need to audit its books. There is currently no cut-off figure for the amount the company can waive for auditing.
• The company can amalgamate with other single-shareholder companies and transfer all shares to one shareholder.
• A limited company formed under the CCC can be converted into a single-shareholder company and vice versa.
The single-shareholder company programme may encourage the registration of SMEs as limited companies, as they would have greater access to financial resources and lower compliance costs compared with limited companies incorporated under the CCC.
As well, other stakeholders such as suppliers and creditors will also benefit from the legal status as a registered limited company, which, for example, provides more convenience to review the status of a single-shareholder company through the Business Development Department.
The draft is currently being reviewed by the department's legal division. In all likelihood, it will be proposed to the National Legislative Assembly, at which time it should become clearer whether the new law will, in practice, benefit and promote SMEs.