A limited liability company belongs to commercial companies with capital. General and limited partnerships belong to the commercial partnerships. The legal basis of each company is defined in the Commercial Companies Code and the Civil Code. The articles of association of a commercial company oblige the partners to pursue a common goal by making contributions (or by cooperating in some other way if the articles of association or the articles of association so provide). Partnerships and limited liability companies may commence business activities after they have been entered into the register of entrepreneurs at the National Court Register. Read the article till the end and find out what a limited liability company, general partnership and limited partnership are.
Limited Liability Company.
The most popular limited liability company is a limited liability company. It can be formed by as little as one business entity. Limited liability company is regulated by the Commercial Companies Code. Its co-members are not responsible for the company’s liabilities. In case of execution the creditor has the right to collect receivables only from the assets of the company, defined by the amount of the initial capital. However, all those provisions must be included in the contract. The agreement between partners is made in a form of notarial deed, that is why the costs of its creation are much higher than in case of other companies.
Limited liability company, general partnership and limited partnership – General partnership
General partnership belongs to the simplest of commercial companies. To be established it must have at least two partners. They can be natural persons, legal persons, organizational units that are not legal persons but have legal capacity. Partners of the general partnership are liable for its obligations with all their assets. However, there is a difference in the order of satisfying the creditor’s claims. In a general partnership, the liability of partners is subsidiary (this means that execution from the assets of the partner is possible only when execution from the assets of the partnership proves ineffective).
A limited partnership may be formed by: natural persons, legal persons and statutory entities, in particular other commercial companies. The partners of a limited partnership may be divided into two categories. The differences arise both in the liability to be assumed, but also in the powers to represent the partnership. The general partner, or so-called active partner, bears full responsibility for the obligations of the partnership, as well as managing its affairs and representing it. The second type of partner in a limited partnership is a limited partner referred to as a passive partner. As a rule, he does not manage the affairs of the partnership or represent it. His liability is limited to the limited partnership amount.