For information only – not an official document
28 July 2021
UNCITRAL adopts the Legislative Guide on Limited Liability Enterprises
VIENNA, 28 July (UN Information Service) – At its fifty-fourth session, the United Nations Commission on International Trade Law (UNCITRAL) adopted an UNCITRAL Legislative Guide on Limited Liability Enterprises (the Guide). It is part of UNCITRAL’s ongoing series of texts aimed at reducing the legal obstacles encountered by micro, small, and medium-sized enterprises (MSMEs) throughout their life cycle. The Guide provides for a simplified legal form for businesses and facilitates the formation and operation of MSMEs and also assists MSMEs in moving from the informal to the formal economy.
The UNCITRAL Legislative Guide on Limited Liability Enterprises is addressed to States at different level of development wishing to improve the legal environment for MSMEs. The Guide can benefit MSMEs in emerging economies as well as those in high income economies in need of a flexible and easy to manage legal structure to start and scale-up a business. It aims to reform or simplify existing company law and also offers a separate legal regime for MSMEs. Another important feature is that the Guide recommends solutions that avoid placing unnecessary legal burdens on MSMEs.
The Guide is structured around 32 recommendations and related commentary which are based on best practices of States representing the legal traditions around the world and deal with the main legal aspects of the formation and operation of micro, small and medium-sized limited liability enterprises (LLEs). Topics addressed include: registration of the LLE, the rights of its members and decision-making, the member’s contribution to the LLE and LLE distributions to the members. The Guide also provides guidance on how members can transfer their rights to third parties, withdraw from the LLE, solve disputes on the governance and operation of the business and how the LLE can be dissolved. While the Guide recommends a few mandatory provisions to strike a balance between the interests of the MSMEs and those of the State, creditors and other third parties, most of the recommendations are default provisions which the members of the LLE may exclude or adapt to their own needs.
The Guide will be available on the UNCITRAL website at https://uncitral.un.org/en/texts/msmes.
The United Nations Commission on International Trade Law (UNCITRAL) is the core legal body of the United Nations system in the field of international trade law. Its mandate is to remove legal obstacles to international trade by progressively modernizing and harmonizing trade law. It prepares legal texts in a number of key areas such as international commercial dispute settlement, electronic commerce, insolvency, international payments, sale of goods, transport law, procurement and infrastructure development. UNCITRAL also provides technical assistance to law reform activities, including assisting Member States to review and assess their law reform needs and to draft the legislation required to implement UNCITRAL texts. The UNCITRAL secretariat is located in Vienna, Austria, and maintains a website at uncitral.un.org.
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For information, please contact:
José Angelo Estrella Faria
Principal Legal Officer and Head, Legislative Branch