Research On Governance Mechanism Of One Man Company

One-man company has been admitted by most countries in the world after a long-termdevelopment and improvement. After the modification of the Company Law, one-mancompany’s legal status is officially recognized. As a special form of corporate system,one-man company has many advantages, like its’ small-scale of operation, high efficiency,flexible operation, simple governance structure, low operating costs. However, it’s very easyfor one-man company to abuse the one-man company’s independent personality and limitedliability of the shareholder, as it has only one shareholder, who is controlling the company.The appearances of one-man company and it’s creditors’ infringement by the only shareholderare usually occurred. Improvement of one-man company’s governance system should be builtin base of limiting shareholder’s right and one-man company’s independent personality andlimited liability of the shareholder.Along with the development of the socialist market economy, one man company willplay a good role in economic development as a kind of rising and flexible commercialorganization. But there are some flaws in the governance mechanism of one man company,we should improve one man company governance system through the improvement of theoryand practice. So that we can make it play an important role in economic progress in the future.In this essay, in base of traditional company governance system theory, through the studyof one-man company governance system in foreign countries, author gave some suggestionson disadvantages of one-man company and hope these suggestions can make contributions toacademic research and legislation.