The Ethiopian Commercial Code of 1960 has been in constant need of amendments in order to addres contemporary stages of development.
As expected, the amendment process that started in early 1990s took decades to materialize. The main reasons for such amendments emanated from the main belief that the 1960 Code contained provisions that are difficult are difficult to implement and prove to be up to many distinct interpretations.
Notwithstanding, the new Ethiopian Commercial Code has been promulgated. One of the various things that the new Commercial Code introduces is a “One Person Company”. This platform is completely new for the Ethiopian business environment since a business person, in the previous law, could perform business only through a sole proprietorship form if he/she wished to do it alone. As a consequence, this situation has raised a series of problems that could not be avoided.
In line with this, it is believed that forming a separate legal person from the member by allowing the natural persons to set up a “One Person Company” in the form of limited liability, this would allow for the ordinary public to find a means of integration into the economy.
As a result, this would create a positive impact on small and medium enterprises where entrepreneurs will not have reasons to fear that they will lose all their personal assets as a consequence of subsequent failure of the business.
Source: Further Africa
Link: https://furtherafrica.com/2021/09/22/ethiopias-commercial-code-promotes-entrepreneurship-through-one-person-company-amendment/
