A civil partnership does not have legal personality, and therefore it cannot appear in court, incur liabilities or own property. All of the above activities are performed by its partners. It is they who may be a party to court proceedings and have the ability to incur liabilities. At the same time they are co-owners of the assets contributed to the company and developed by it in the course of its business. Read the article till the end and find out who is responsible for the liabilities of a civil law partnership.
Solidarity
All partners in a civil partnership are liable for the liabilities of the partnership. This is done jointly and severally and without limitation. This means that the liability of the partners is not limited to their contributed capital or a certain amount. It also applies to private assets which, if necessary, are seized to cover liabilities. And it does not matter here how it was created and as a result of which of the partners’ actions. All are jointly liable. Therefore, partners in a civil partnership have the same right to represent the partnership, to make decisions, or to incur obligations, and they bear all the consequences for the functioning of the partnership and the actions of the other partners.
Liability for the obligations of a civil law partnership – What happens in the event of default?
If a partnership fails to meet its obligations, whether it owes money to contractors, authorities or otherwise, the creditor must take the partners of the partnership directly to court. This is because a civil partnership cannot be sued because it is only a contract (as already mentioned above, a civil partnership does not have legal personality). In this situation, the creditor may demand payment of the entire liability from one of the partners or from all of them. He may also claim his rights from the assets of the partnership as well as from the private assets of the partners. If the liability is paid by one of the partners, he is entitled to compensation from the other partners.
Is it possible to protect oneself from the liability of the partnership?
No. If the liability arose when the entrepreneur belonged to the partnership, withdrawal from it will not protect him from liability. The same is true when a new partner joins the company. If at the moment of his joining the company he had liabilities or debts, he will also be held responsible for them.