Limited partnership, or partnership in faith - the union of several persons who have contributed to the fund. A partnership is formed as a result of the merger of the capital of 2 or more persons with the registration of a legal entity.
Features
The main distinguishing feature of such a legal form is that:
- there are always full partners in society whose liability is limited not only by the size of contributions, they bear it within the framework of their personal property;
- necessarily there are limited partners, that is, depositors whose liability is limited by the size of the contribution to the partnership.
As a result, it turns out that the management of the company is completely given to compliments, that is, full comrades, and the rest of the participants, commandists, need only trust these people. Hence the name - faith partnership.
Outside of our country, such partnerships are quite common. In our country, probably, there is no such trust between citizens and legal entities to form societies on trusting relationships. Therefore, such a legal form of a legal entity is very rare.
Purpose of creation
Limited partnership may carry out any economic activity that is not prohibited by applicable law, produce or sell something, provide services. If the selected type of activity falls under licensing, then permission to carry out its implementation must be obtained.
What is a joint-stock limited company?
Unlike ordinary partnership in faith, limited partnership is entitled to an additional issue of its own shares. In addition to the issue, AKO has the right to place its shares in open bidding. It is also attractive in this legal form that paid dividends on shares are not taxable.
Share capital
The minimum and maximum capital at the level of legislation is not established. This is due to the fact that full partners are liable for the obligations of a legal entity with their property.
Profit distribution procedure
As a rule, profit and loss between the participants in the partnership are distributed depending on the size of the share in the joint capital. It is impossible to provide for a constituent agreement to limit one or more participants in making a profit or reducing liability.
In cases where it was not possible to obtain the planned profit, and the price of net assets decreased to the amount of capital, the profit is not distributed among the participants. As soon as the value of the assets becomes higher than the share capital, the distribution of profits between the partners can be carried out immediately.
Partnership Name
Regulatory acts establish certain requirements for a company name, namely:
- the name of the partnership must contain the names of all partners or the phrase: "Last name of one compliment and company";
- the name must also contain the legal form, that is, “limited partnership” or “faith society”;
- if the name contains the name of the commandant, then he automatically becomes a compliment.
Number of contributors
To register a legal entity, you will need 2 or more persons, while one will act as a commandant, and the other a compliment. At least one individual entrepreneur or a commercial company must be present in the economic limited partnership as a full partner.There is no such requirement for other participants, as they do not take part in entrepreneurial activity.
Rights and obligations of compliments
Full comrades have a fairly wide range of rights, namely:
- take part in the distribution of profits;
- have income as part of their contribution;
- receive part of their share in the event of termination of the partnership;
- receive any information regarding the financial and economic activities of a legal entity.
Duties of full partners:
- to contribute to the time agreed upon by the constituent documents;
- keep full commercial secrets regarding the activities of the partnership;
- to be fully responsible for the obligations of the company, including its own personal society.
Commandant Rights
Since a limited partnership is a society based on faith, then probably the most basic obligation of any investor is to trust full partners. Also, depositors are required to make their contributions within the time period specified by the constituent agreement.
Basic rights:
- receive income from the activities of a legal entity;
- receive information on the activities of the partnership at the end of the year;
- leave the ranks of participants after the fiscal year with full reimbursement of the value of previously made deposits;
- dispose of his shares at his discretion, that is, he has the right to transfer his share to any of the participants in the partnership or to a third party;
- when transferring a share to a third party, observe the preemptive right of the remaining investors.
At the discretion of the founders of the partnership, the limited partners may be assigned additional rights and obligations.
Partnership Management
Management of a legal entity is usually carried out by full partners. However, in the memorandum of association it is possible to provide for cases when a certain decision should be made only by all participants in the company, including limited partners.
Usually one compliment has one vote, unless otherwise provided by statutory documents. These participants have a wider range of powers, so a full friend, even without taking a direct part in the leadership, has the right to familiarize himself with the documentation of a legal entity, including accounting and tax reporting. If the restrictions of this right are provided for in the statutory agreement, then it is void.
When organizing a society, it is necessary to provide for how business will be conducted. Participants in a limited partnership may act on behalf of the company in person or jointly. If the second option is chosen, then to conclude any transaction, you will need to obtain the consent of all the compliments. If the full partners decided to entrust the conduct of affairs to one of the participants, then they must draw up a power of attorney indicating the list of powers.
A responsibility
If, for any reason, the partnership cannot settle its obligations, then the creditors have the right to submit a claim to one or all full partners at once. In a limited partnership, the liability of a participant who has left the company is still valid for 2 years from the date of withdrawal, but only in that part of the debts that arose before the withdrawal from the legal entity.
Commandists are solely responsible in the amount of their contribution.
Constituent documents
When establishing a legal entity with the legal form "limited partnership", a memorandum of association or agreement is drawn up, which all founders must sign. Key points of the document:
- name;
- location;
- amount of share capital;
- the composition of capital, that is, it is possible to contribute not only cash, but also property;
- the procedure for joining a partnership;
- the order of exit from society;
- responsibility, duties and rights of all participants.
Be sure to indicate how the distribution of profit is made, in what time period the received income is paid. How is a legal entity managed, types of economic activity.
Title documents must necessarily contain the procedure for making changes to them, in which cases they need to be made. For example, what happens if the composition of the participants changes, or what happens if the total capital of a limited partnership decreases.
Be sure to prescribe the procedure for making changes in the event of the death of one of the full partners or in which cases the reorganization of the partnership will be carried out, what are the conditions for the liquidation of a legal entity.
Reorganization
Like any legal entity, limited partnership can be transformed into any other legal form. For example, in an LLC, a full partnership or a closed joint-stock company.
Liquidation
Upon liquidation of the partnership, all rights to transfer control to third parties are lost. There are several ways to liquidate a legal entity:
- under duress, through bankruptcy proceedings;
- on a voluntary basis;
- alternative method, that is, by reorganization.
Upon the withdrawal of all participants from the partnership, except for one, such a person has the right to transform the legal entity into a full partnership.