- How to establish One Person Company (OPC)

Given the economic development that the State witnesses today and as small projects have become the most prevalent for young people, as young people are more likely to engage in a commercial activity solely, under a tight legal system, the Egyptian Companies Law 159 of 1981 and Law 4 of 2018 and its Executive Regulations, according to Resolution 16 of 2018 regulate the concept of an OPC, how it is established, its characteristics, which we will briefly discuss as follows:

A one-person company (OPC) means a company with capital fully owned by one person, whether a natural or legal person, in conformity with the company’s purposes. The founder of the company shall not be liable for the company's obligations unless within its allocated shared capital. The company shall elect a unique name for it that is derived from its purposes or the name of its founder. The company’s name shall be followed by an abbreviation that indicates that it is a one-person, limited-liability company. The company’s name shall be placed on its head office and branches (if any) and in all its head letters.

The incorporation process of an OPC:

- A One Person Company (OPC) shall be established at a request submitted by its founder or his representative to the Authority. The OPC shall have Articles of Association that includes the company’s name, objectives, founder details, term, method of management, head office address, branches if any, the capital, regulation of liquidation, and any other information as specified by the Executive Regulations of this Law.

The Executive Regulations of this Law specify the minimum capital for the OPC. The capital shall be paid in full upon incorporation. The capital of an OPC may not be less than 50,000 EGP (Fifty thousand) and be paid in full upon incorporation.

Required Documentation for Incorporation of  an OPC:

1. A certificate of non-confusion of the company’s name, approved by the commercial register.

2. A bank certificate proofing deposit of the capital in full in a bank of at least 50,000 EGP (Fifty thousand).

3. If the owner is a legal person, the following documents shall be submitted:

- Power of attorney issued by the legal representative of the legal person.

- A recent extract from the commercial register of the legal person (with the original being submitted for review).

4. If the founder of the company is a public legal person, the approval of the Prime Minister or the competent minister, as the case may be, shall be obtained.

5. Power of attorney to establish an OPC , whether the founder is a natural or legal person. The POA shall provide for “contracting with oneself and third parties in the incorporation of companies” before the notary public.

6. If the company owner or director is a foreigner, a security inquiry form shall be submitted.

7. A copy of the owner's national ID (for Egyptians).

 - A copy of the owner's passport (for Foreigners).

8. A copy of the proxy's national ID (for Egyptians).

 - A copy of the proxy's passport (for foreigners. However, the residence permit shall be valid).

9. An official extract of the register of accountants and auditors, to GAFI, proofing their eligibility to review and approve the financial statements of trust companies for the first time, or the original acknowledgment of acceptance of appointment if the accountant previously submitted this certificate to the Authority.

10. A copy of the card of registration with the Bar Association for the company’s legal advisor. However, the degree of registration shall not be less than appellate.

11. A copy of the registration card at the Bar for the lawyer who ratifies the MoA before the Bar Association (at least a first-instance court attorney).

12. Approval of the competent authorities if the purposes of the company require obtaining certain approvals (prior approval).

13. In the event of an in-kind share at the time of incorporation:

- The evaluation report of the in-kind share shall be submitted by experts and professionals regulated by law, as per the type of each share and the founder's approval of the validity of the evaluation.

14. In the case of establishing an OPC under the public free zones system in accordance with the provisions of Investment Law 72 of 2017, the above-mentioned documents shall be submitted,

- Obtaining the approval of the Authority before incorporation. The approval shall be issued by the board of directors of the free zone at which the project is to be established.

Restrictions imposed on OPC:

1. Incorporation an OPC;
2. Public subscription, whether upon incorporation or upon increasing capital;
3. Division of the company's capital in the form of negotiable shares;
4. Borrowing by issuing negotiable securities; and
5. Practicing any activity including insurance, banking, saving, receiving deposits, or investing money for third parties.

 Scope and Powers of an OPC’s Founder and Owner:

 - The founder and manager of an OPC shall exercise due diligence as a prudent person in exercising his powers and managing the company.

 The director of the OPC may not take over the management of another company carrying the same activity, may not contract with the company managed by him for his account or third parties, and may not exercise the same activity.

 - The founder of an OPC is responsible for all its affairs. To this end, the founder, in particular, may:

1. Amending the company's articles of association;

2. Dissolving and liquidating the company in accordance with the provisions of this law and its Executive Regulations;

3. Merging the company with/to another company, or converting it to a company of another nature;

 4. Increasing or decreasing the company's capital by no less than the minimum as stipulated in the Executive Regulations of this Law;

5. Appointing one or more directors of the company, establishing their powers and authorities, and approving their signatures. The director, or such a person as determined by the founder from among them, if they are more than one, shall represent the company before the courts and third parties. The director(s) shall be responsible for the company’s management before the owner; and

 6. Removing the company’s director or limiting his powers.

 In all cases, the above-mentioned acts shall only be effective against third parties from the date of their registration with the Commercial Register.

 - The OPC shall be declared and shall have a legal personality as of the date of its registration in the Commercial Register. The contracts and acts made by the founder in the name of the company under incorporation shall apply to the company after incorporation as necessary for the incorporation.