Commandite partnership: what you need to know

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43

The current legislation establishes the possibility of carrying out commercial activities through the establishment of organizations with authorized capital divided into the corresponding shares of the founders. These organizations can be created in the form of business companies or partnerships, which, in turn, can be formed in such organizational and legal types as a general partnership and a limited partnership (in faith). The immediate features of the organization and functioning of the latter will be discussed below.

Special partnership: concept

A limited partnership is a commercial organization, the participants of which are divided into two groups. The first includes entities (called general partners) who carry out commercial activities on behalf of the limited partner and are liable for the obligations of the latter with all their property. The second group consists of entities (called limited partners) who are not directly involved in the conduct ofpartnership of commercial activities and bearing the risk of probable losses caused by the latter, within the limits of the amounts entered by them into the authorized capital of contributions.

Basics

The participants of a limited partnership with the status of general partners carry out their activities, and are also liable for the relevant obligations of the latter, in accordance with the standards established by civil law governing the activities of participants in a general partnership.

Entities with the status of general partners have the right to participate exclusively in one limited partnership. In turn, the entities that are participants in a general partnership are not en titled to have the status of general partners in a limited partnership.

The number of participants in a partnership with the status of limited partners cannot exceed twenty units. If the specified amount is exceeded, the limited partnership must be transformed into a business company within a year. If, after the expiration of the specified period, the partnership has not been transformed or the number of limited partners has not been reduced to the established limits, then the partnership must be subjected to liquidation through legal proceedings.

The provisions of civil law governing the activities of a general partnership may be applied to the work of a limited partnership in the event that they do not conflict with legislativestandards that ensure the functioning of a limited partnership.

About brand name

Another legal requirement that a limited partnership must meet is a company name. The latter must necessarily be formulated in one of the following options:

• names of all general partners with the addition of the phrase "limited partnership";

• name of at least one general partner with the addition of the phrase "limited partnership and company".

In the event that the name of any investor is included in the company name, the latter acquires the status of a general partner.

Memorandum of Association

The creation and subsequent activities of a limited partnership are carried out in accordance with the provisions of the memorandum of association, the signing of which is carried out by all persons having the status of general partners.

In addition to the provisions of Art. 52 of the Civil Code of the Russian Federation data, a limited partnership agreement must include the following information:

• conditions determining the amount and composition of the share capital;
• the amount of capital shares owned by each of the general partners;
• change order of last;
• composition, as well as the terms and procedure according to which contributions are made;
• responsibility for violation of the mentionedorder;
• cumulative amount of contributions made by entities with the status of contributors.

Liability of a limited partnership

As stipulated by the legislative provisions, the limited partner is liable for her obligations with all the property that she possesses. In the event that the latter is not enough to cover the debt on obligations, creditors have the right to present their claims both to all general partners and to any of them.

A general partner who does not have the status of a founder of a limited partnership is liable for obligations (which arose before his entry into the latter) to the same extent as all other general partners.

A general partner who left a limited partnership is liable for the obligations of the latter that arose before the moment of its withdrawal, to the same extent as all other participants. The term of liability for the said partner is two years, calculated from the date of approval of the report on the activities carried out by the partnership for the year in which the disposal occurred.

Partnership management

Another question to consider when studying a limited partnership is how it is managed. So, the management of the functioning of a limited partnership is carried out exclusively by entities with the status of full partners. The direct order of management, as well as the conduct of business activities,general partners are carried out in accordance with the rules established by law for general partnerships.

Contributors limited partners do not have the right to participate in the management of the latter and cannot challenge the actions taken by general partners related to the management of the partnership and the conduct of its affairs.

So, having considered all of the above, we can conclude that a limited partnership is one of the actively used forms of commercial activity by a legal entity, which has certain specifics, the understanding of which allows for a fairly efficient business.