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Partnership

What is a partnership?

A partnership constitutes a ‘person-based association’. This arises when at least two persons join together to achieve a common purpose. This personal nature is particularly evident in the fact that the partnership’s existence is, in principle, tied to the specific composition of its partners. Membership of a partnership is therefore, in principle, neither transferable nor inheritable, unless this is agreed in the partnership agreement.

When can a partnership be dissolved?

Partnerships (general partnerships, limited partnerships, civil-law partnerships and silent partnerships) are not legal entities. Unless otherwise agreed in the partnership agreement, in the case of a general partnership, the death of a partner or the commencement of insolvency proceedings against a partner will result in its dissolution. Similarly, in the case of a limited partnership, unless otherwise agreed in the partnership agreement, the death or insolvency of the sole general partner will result in its dissolution; however, the death of a limited partner will not result in dissolution, whereas their insolvency will. This circumstance must be taken into account by including appropriate continuation clauses in the partnership agreement.

 

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