Some Remarks on the Rights and Responsibilities of Founders under the Ethiopian Commercial Code

Abstract

Companies do not suddenly come in to being. Rather they require the effort and struggle of some individuals which are in most cases called Founders. Therefore, we can say companies are formed by the voluntary act of founders conforming to the general norms established by Commercial laws. Accordingly, in order to bring the company into existent these individuals need to enter in to contract and to transact with third parties. As a result of these, rights, responsibilities and liabilities of these individuals may arise which in turn calls for a deeper thought from the eyes of the Law. Hence, the main thrust of this article is to identify the major rights and responsibilities of founders that are found under the Ethiopian commercial code. This being the aim it will also explore the various attempts made to define founder. In doing so, the paper finds out that the word founder has not been defined anywhere in the commercial code. Moreover, the paper will discuss the experience of other countries at a glance, in order to give some lesson for the country. Therefore, the writer based on the analyses of relevant literature and experiences of countries, argues that, the commercial code of Ethiopia is not comprehensive enough to regulate the rights and responsibilities of founders and to protect the interest of third parties as well. More importantly, the commercial code fails to clearly stipulate the specific rights and responsibilities of founders; because one can only be acquainted with all the rights and responsibilities after consulting other related laws/proclamations. Consequently, the writer recommends for the proper amendment of the commercial code on issues that relates to founders, considering the changes occurred from the time where the commercial code come in to effect.