The essence of a Limited Partnership is to distinguish a difference between limited partners and general partners.
A limited partner is a partner whose liability is limited to the amount of the limited partnership which is the amount specified in the articles of association. If the limited partner submits contributions to the company in an amount higher than the sum of the limited partnership, then it is free from responsibility for any liabilities of the company.
A general partner is a partner who is obliged to run the company’s matters and represent it. Due to its representative role, it bears full responsibility for the company’s obligations.
The following configurations of persons who are partners can be distinguished:
- contract between individuals
- contract between legal entities
- contract between a natural person and a legal person
The most common combination is the contract between a natural person and a Limited Liability Company. The general partner responsible for all his assets is the company and the role of a limited partner who gains profits belongs to a natural person.
This allows you to avoid the double taxation that occurs in the type of Limited Liability Company and at the same time to limit liability.
Please contact us to find out more about all the advantages resulting from this form of doing business.