The limited partnership or limited partnership is a type of commercial society in which the partners are participants in the management of the company itself, responding unlimitedly with their assets, while there are other partners who do not participate in the management and respond in a limited way.
This type of partnership, also known for being a mixed partnership, allows the existence of two types of partners:
- The partners who have the right to and manage the operations and tasks of the company, and whose responsibility is subject to corporate debts (they have unlimited liability).
- The partners who are not involved in the management of the company, but have limited liability. They are the so-called limited partners and it is common when the company needs foreign capital from some people but they do not want them to intervene in the administration.
Requirements to create a limited partnership
The requirements for this type of company are:
- Two partners are needed: one limited partner and one collective (limited and unlimited liability, respectively)
- No minimum capital required
- Tax through Corporate tax
- Be registered in the Companies register, in the corresponding section of companies
What types of limited partnerships exist?
We can find two types of limited partnerships that depend on the auditing of their accounts:
- On the one hand, we have the limited liability companies that are obliged to audit their accounts and deposit them in the commercial register when they exceed certain limits. The same law applies to them as to corporations, and are considered as capital companies.
- On the other hand, simple limited partnerships are those that are not obliged to audit their accounts or deposit them in the commercial register, unless at the end of the year all of their general partners or the majority are foreign companies.