{"id":13567,"date":"2022-07-06T13:18:18","date_gmt":"2022-07-06T11:18:18","guid":{"rendered":"https:\/\/labre.nl\/?p=13567"},"modified":"2022-07-06T13:31:38","modified_gmt":"2022-07-06T11:31:38","slug":"belgium-the-name-of-your-limited-partnership-whats-in-a-name","status":"publish","type":"post","link":"https:\/\/labre.nl\/en\/2022\/07\/06\/belgium-the-name-of-your-limited-partnership-whats-in-a-name\/","title":{"rendered":"Belgium: The name of your limited partnership: what&#039;s in a name?"},"content":{"rendered":"\n<p>&nbsp;<\/p>\n<p><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"color: #f18101\">Since the abolition of the capital requirement for the limited liability company, this form of company has gained in popularity.<\/span> <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The (relatively high) capital injection that had to be provided at the start-up of activities was abolished after all. <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Nevertheless, the limited partnership remains a frequently used solution to avoid further formalism. <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">However, such a company cannot be set up alone: \u200b\u200bat least two partners are required.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/strong><\/p>\n<p><strong><span style=\"vertical-align: inherit;color: #f18101\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Limited partner versus general partner<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/strong><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The law stipulates that, on the one hand, a limited partner is required (who, in principle, only runs the risk of his contribution to the company) and, on the other hand, a general partner. <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The general partner always acts externally and will represent the company in law. <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The limited partner stays in the background, as the name already suggests.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The general partner is, pursuant to Article 4:14 of the Companies and Associations Code (hereinafter: &#8216;CAC&#8217;), jointly and severally liable for the debts of the company to third parties with his own assets. <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">In this respect there is thus a breach of the company&#8217;s legal personality.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><strong><span style=\"vertical-align: inherit;color: #f18101\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Liability of the limited partner?<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/strong><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">In principle, a limited partner runs much less risk. <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Only his capital contribution to the company is at stake.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">However, a limited partner can also be <span style=\"text-decoration: underline\">jointly and severally liable<\/span> for (certain) debts of the limited partnership. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Article 4:25 &sect;1 of the CAC stipulates that a limited partner may not perform any acts of management. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The sanction for this is laid down in the second paragraph of this article: if the limited partner breaches this provision, he is jointly and severally liable for the obligations of the partnership that he has entered into or participated in while breaching this prohibition.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">However, Article 4:25 &sect;2 CAC also contains a second paragraph, which increases the liability of the limited partner. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">If the limited partner makes a habit of breaking the passivity he is obliged to have according to the law, he will be jointly and severally liable together with the general partner for all the company&#8217;s obligations.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The above mentioned liabilities of the limited partner are obvious and a sanction for his acting in breach of the legal provisions of the CAC that apply to his position. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">However, there is another reason for the joint and several liability of the limited partner for <span style=\"text-decoration: underline\">all<\/span> the obligations of the partnership, the fulfillment of which is independent of the actions of the limited partner. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">If the <span style=\"text-decoration: underline\">name of the limited partner<\/span> appears in the name of the partnership, he too will be jointly and severally liable for all the obligations of the partnership towards third parties.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">It is therefore advisable to think twice about the <span style=\"text-decoration: underline\">name<\/span> of your limited partnership. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">It is often the case that a family member will be asked to take on the role of limited partner after all. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Including the family name in the company name would then obviously have an undesirable effect.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><strong><span style=\"vertical-align: inherit;color: #f18101\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Conclusion<\/span><\/span><\/span><\/span><\/span><\/span><\/strong><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The establishment of a limited partnership remains attractive due to the absence of a capital requirement, the lack of formalism and the guaranteed discretion. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">However, the limited partnership does entail some risks, with the liability of the partners at the centre. <\/span><\/span><\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The liability of the general partner is virtually unlimited, but the limited partner also runs a great risk if he acts thoughtlessly.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Legalis Advocaten was recently involved in a case where a limited partner was successfully held liable for the debts of the limited partnership <span style=\"text-decoration: underline\">due to the fact that his name was included in the name of the partnership<\/span>. <\/span><\/span><\/span><\/span><\/span><\/span><\/span><strong><span style=\"vertical-align: inherit;color: #f18101\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Forewarned is forearmed.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<p><strong><em><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">For further information, contact:<\/span><\/span><\/em><\/strong><\/p>\n<p><span style=\"color: #f18101\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Sebastian Meeuwens<\/span><\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> , Lawyer<\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Legalis lawyers, Tessenderlo<\/span><\/span><\/p>\n<p><span style=\"color: #f18101\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">e: sebastiaan.meeuwens@legalis.be<\/span><\/span><\/span><\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">t: +32 13 671201<\/span><\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">#WLNAdvocate #Belgium #Legalis #business #law #legal #debt #corporatelaw #companylaw #liability<\/span><\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Since the abolition of the capital requirement for the limited liability company, this form of company has gained in popularity. The (relatively high) capital injection that had to be provided at the start-up of activities was abolished after all. Nevertheless, the limited partnership remains a frequently used solution to avoid further formalism. However, such&#8230;<\/p>\n","protected":false},"author":3,"featured_media":13569,"comment_status":"close","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_ppma_block_editor_authors":""},"categories":[48],"tags":[],"ppma_author":[68],"class_list":["post-13567","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-warwick-legal-network-2"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Belgium: The name of your limited partnership: what&#039;s in a name? &#183; Labr\u00e9 advocaten<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/warwicklegal.com\/news\/532\/belgium-the-name-of-your-limited-partnership-whats-in-a-name\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Belgium: The name of your limited partnership: what&#039;s in a name? &#183; Labr\u00e9 advocaten\" \/>\n<meta property=\"og:description\" content=\"&nbsp; Since the abolition of the capital requirement for the limited liability company, this form of company has gained in popularity. 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&#183; Labr\u00e9 advocaten","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"http:\/\/warwicklegal.com\/news\/532\/belgium-the-name-of-your-limited-partnership-whats-in-a-name\/","og_locale":"en_US","og_type":"article","og_title":"Belgium: The name of your limited partnership: what&#039;s in a name? &#183; Labr\u00e9 advocaten","og_description":"&nbsp; Since the abolition of the capital requirement for the limited liability company, this form of company has gained in popularity. The (relatively high) capital injection that had to be provided at the start-up of activities was abolished after all. Nevertheless, the limited partnership remains a frequently used solution to avoid further formalism. However, such...","og_url":"http:\/\/warwicklegal.com\/news\/532\/belgium-the-name-of-your-limited-partnership-whats-in-a-name","og_site_name":"Labr\u00e9 advocaten","article_published_time":"2022-07-06T11:18:18+00:00","article_modified_time":"2022-07-06T11:31:38+00:00","og_image":[{"width":767,"height":767,"url":"https:\/\/labre.nl\/wp-content\/uploads\/sebastiaan5.jpg","type":"image\/jpeg"}],"author":"Tara Bruijn","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Tara Bruijn","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"http:\/\/warwicklegal.com\/news\/532\/belgium-the-name-of-your-limited-partnership-whats-in-a-name#article","isPartOf":{"@id":"https:\/\/labre.nl\/en\/2022\/07\/06\/belgium-the-name-of-your-limited-partnership-whats-in-a-name\/"},"author":{"name":"Tara Bruijn","@id":"https:\/\/labre.nl\/en\/#\/schema\/person\/9bac6a08a71a91ace6aa8384b7a031fe"},"headline":"Belgium: The name of your limited partnership: what&#039;s in a name?","datePublished":"2022-07-06T11:18:18+00:00","dateModified":"2022-07-06T11:31:38+00:00","mainEntityOfPage":{"@id":"https:\/\/labre.nl\/en\/2022\/07\/06\/belgium-the-name-of-your-limited-partnership-whats-in-a-name\/"},"wordCount":631,"publisher":{"@id":"https:\/\/labre.nl\/en\/#organization"},"image":{"@id":"http:\/\/warwicklegal.com\/news\/532\/belgium-the-name-of-your-limited-partnership-whats-in-a-name#primaryimage"},"thumbnailUrl":"https:\/\/labre.b-cdn.net\/wp-content\/uploads\/sebastiaan5.jpg","articleSection":["Warwick Legal Network"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/labre.nl\/en\/2022\/07\/06\/belgium-the-name-of-your-limited-partnership-whats-in-a-name\/","url":"http:\/\/warwicklegal.com\/news\/532\/belgium-the-name-of-your-limited-partnership-whats-in-a-name","name":"Belgium: The name of your limited partnership: what&#039;s in a name? 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