A Comparative Study of The Legal Status of a Shareholder in a One-Person Corporation in Light of the Palestinian Decree-Law Regarding Corporations No. 42 of 2021

This study aimed to identify the legal status of the partner in a single-person company, given the particularity of this type of company which is based on the sole ownership of one partner. It further sought to clarify the conditions that must be met by the partner and the limits of their legal liability for the company’s obligations. Consequently, the study aimed to elucidate the extent to which this aligns with the general principles of companies founded on the multiplicity of partners, the intention of participation, and the contractual concept underlying the establishment of commercial companies. The researcher used a descriptive-analytical approach by studying and analyzing the texts of Decree-Law No. (42) of 2021 concerning Palestinian companies. Additionally, a comparative method was adopted by contrasting it with the Jordanian Companies Law No. (22) of 1997 and its amendments. The importance of this study stems from its focus on a contemporary subject at the Palestinian level, due to the recentness of its legal regulation. The main problem addressed is the following question: Does the partner in a single-person company enjoy a legal status that differs from that of a partner in a company in general, in terms of its concept, the establishment of the company, the conditions required, and the nature of their liability for the company’s obligations? The study reached several conclusions, the most important of which is that the partner in a single-person company enjoys a distinct legal status that differentiates them from other partners in companies generally. This partner is the individual who establishes the single-person company or to whom all shares or stocks in the company—permitted by the legislator to be composed of one person—are transferred. They undertake all procedures required by law to establish the single-person company, which is founded based on their unilateral will rather than a contract, without the presence of multiple partners. The study recommended amending the definition of “company” in civil laws to correspond with the nature of the single-person company. It also recommended that the Palestinian legislator explicitly regulate the establishment of single-person companies through indirect methods.