We explain what a general partnership is and the structure of its administration. Also, examples and what a limited partnership is.
What is a general partnership?
In commercial law, a collective partnership is understood to be one of the types of commercial society that existthat is, an external company (that acts as a person different from that of its partners) that carries out commercial or civil activities under the same name or company name. In other words, it is a form of commercial grouping.
Being a direct descendant of the mercantile companies originating from the Middle Ages, it is one of the oldest corporate forms that exist. It is usually given as a continuation of a merchant's inheritance, and even as an extension of a family business.
The main and distinctive feature of the general partnership is unlimited liability for debt, that is, in the event of not being able to cover its debts even through the liquidation of its assets, cases of bankruptcy, suspension of payments, among others, the partners of the same they must take charge of the payment to the creditors. In the latter it is distinguished from other forms such as public limited company wave limited liability company.
On the other hand, the administration of this type of company can occur from a structural point of view, as follows:
- Legal. Any partner of the same will be the administrator, whose actions must be agreed upon plurally. This method is imposed when the statutes do not say anything regarding the administration of the company.
- Private. The company has an express administrator, appointed by an express agreement or by the company's bylaws, and said responsibility will not be transferable without the signing of another agreement.
- Not private. The figure of one or more possible administrators is established by agreement or contract, but said position will not be linked to the individual, but may be occupied by others, in accordance with the instructions of the partners.
See also: Civil society
Examples of general partnership
Possible examples of general partnerships are law firmsthe studios of architects, economists or auditors, if not medical groups; collective organizations in which the prestige of their members and the trust they generate is key to obtaining new clients.
limited partnership
A limited partnership or limited partnership is, on the other hand, a type of personalistic societywhich simultaneously presents general partners who respond unlimitedly to the debts incurred and participate in the management of the company; and limited partners who do not take part in the management but also do not take part in the responsibilities that exceed the capital strictly committed to the limited partnership.
