Since Liechtenstein as the first country in the world acknowledged the legal position of
Single Member Liability Companies by statute law this type of company has been legally
recognized in an increasing number of countries. But in practice England is the first country
which paved the way to one man company practice with the Solomon case. Single Member Company
emerged and developed rapidly in recent years for the reason of their strong economic
political and legal theoretical basis. As a result we can dig into their emergence and
development from a social and historical point of view. It is helpful to encourage investment
develop economy and facilitate employment and more freedom to the owner of the company. When
compared with ordinary types of companies Single Member Companies' legal character lies in the
singularity of shareholder and the particularity of its corporate governance structure. Thus it
increases the possibility for the single shareholder to abuse the rights and damage the
interests of companies' creditors and tax authority. In order to protect the company's
creditors it is necessary to regulate single member company strictly and set up integrated
creditors protection rules. Therefore the legal status for Single Person Companies should be
authorized and as well positively standardized in order to seek advantages and avoid
disadvantages. Ethiopia has suitable conditions when we analyse the factual situation of a
country to introduce and to benefit from the advantage of one man companies.
