General Partnerships in Spain: A Comprehensive Overview
General Partnerships in Spain
Main Types
General Partnership (Sociedad Colectiva)
- Governed by the Commercial Code.
- No minimum capital amount.
- Partners are jointly and severally liable for the partnership’s debts.
- Transfer of partnership interest requires the consent of every partner.
Simple Limited Partnership (Sociedad Comanditaria)
- Governed by the Commercial Code.
- Two types of partners: at least one general partner with unlimited liability oversees management and representation; at least one limited partner with liability limited to their contribution.
- Limited partners cannot perform management functions or act on behalf of the partnership.
- No mandatory minimum capital.
General Partnership: Features
- Traditional mercantile company, though its importance has diminished.
- Serves as a model for irregular and atypical companies operating under anomalous circumstances.
- Suitable for controlling a holding due to its flexibility in partner agreements.
- Personal companies devoted to performing an economic activity.
- Creates a community of activities with personal partner cooperation.
- Unlimited liability for the company and subsidiary liability for the partners.
- Personal qualities of each partner are carefully considered.
- Operates under the name of its partners, reflecting their reputation.
Process of Incorporation
- Public deed with minimum content outlined in statutes.
- Must be recorded at the Business Registry for regular constitution.
- Minimum content must comply with statutory requirements:
- Name, surname, and address of the partners.
- Registered office.
- Name and surname of managing partners authorized to use the corporate signature.
- Capital contribution of each partner (cash, loans, securities), with stated value or valuation basis.
Relationship Between Partners
The principle of freedom of contract prevails, with statutes applying subsidiarily.
A) The Obligation to Contribute
- Contributions can be in cash, credits, commercial papers, or personal services.
- If a partner fails to contribute, the company can enforce collection or terminate the agreement, forfeiting the partner’s share.
- Delayed contributions incur legal interest and compensation for damages.
B) Right and Obligation to Manage the Company
Types of administration:
- Default: All partners have management power.
- Limited: Specific partners manage, while others have the right to examine management and accounting.
- Statutory: Management is entrusted to one partner in the company’s public deed.