Dissolution of a general partnership or limited partnership
- Dissolution resolution and submission of dissolution resolution
- Entry of a successor into a general partnership or limited partnership
- Deletion from the Commercial Register
A general partnership or limited partnership is dissolved by resolution of the partners, upon expiry of a term, upon attainment of the objective or by compulsory judicial decision.
In general the dissolution of a general partnership or limited partnership consists of three key stages:
- Adoption and submission of a dissolution resolution
- Deletion of the company from the Commercial Register
The basis for dissolution of a general partnership or limited partnership is the resolution of its partners, for which over 3/4 of the shareholders vote in favour, unless the articles of association stipulates a larger majority. If the dissolution of a general partnership or limited partnership is set forth in the partnership agreement, or the general partnership or limited partnership is to be dissolved after the expiry of a term or upon attainment of an objective, the partners may decide to continue the activities of the partnership or merger, division or transformation of the partnership.
The partnership agreement can also specify that the partnership agreement is terminated upon departure of a partner from the partnership, the bankruptcy of the owner, or the death of a partner who is a FIE or the dissolution of a partner who is a legal person.
To dissolve the company, submit to the Commercial Register a joint application by the partners along with the minutes of the meeting of partnership members.
In the event of the death of the partner the partner’s successors have the right to join the general partnership or limited partnership if this is provided for in the partnership agreement or if all partners consent to this. If the successor does not wish to join the partnership or if the partners do not consent to it, the successor shall have the right to receive compensation in a part proportional to his or her share of the estate. The successor may submit an application for joining the general partnership or limited partnership within three months of learning of the right of succession.
The dissolution resolution and submission of application to the Commercial Register in the case of a general partnership or limited partnership is followed by liquidation, in the course of which it is important that you follow a specific series of steps.
Stages of liquidation:
- Appointment of liquidators and entry of their names into the Commercial Register. The liquidators of the partnership shall in general be the partners. Upon agreement between the partners, a third party may be appointed liquidator. At the request of a partner, a court may, provided there is good reason, appoint a non-partner as liquidator.
- Approval of the opening balance sheet prepared upon liquidation and annual report by resolution of the partners. After approval, the opening balance sheet prepared upon liquidation and the annual report shall be submitted promptly to the Commercial Register.
- Dissolution of a partnership, collection of debts, sale of the partnership’s assets and satisfying creditors’ demands. If the partnership’s assets are not sufficient for satisfying the claims of the creditors, the partners shall be equally liable in proportion to their contributions for the partnership’s obligations, unless set forth otherwise in the partnership agreement. If it is not possible to satisfy the demands of the creditors, liquidators must file a bankruptcy petition.
- Preparation of the final balance sheet of the company being liquidated and distribution of assets; in exceptional cases, preparation of an annual report. The residual assets shall be distributed by the liquidators among the partners in accordance with the contributions of the partners, unless provided otherwise in the partnership agreement.
The time necessary for the liquidation of a general partnership or limited partnership is not strictly defined and depends above all on the particularities of the company and the smoothness of cooperation between the various participants in the liquidation.
The activities of a dissolved partnership can also be continued, or a merger, division or transformation of the company may be conducted. To do so, the liquidators must submit to the Commercial Register an application for continuing the company’s activity.
After the general partnership or limited partnership has been liquidated as required, you must submit an application to the Commercial Register for the deletion of the company from the Commercial Register. You will also have to attach a final balance sheet to the application.