General and Limited Partnerships

Find out how to set up a general or limited partnership in Belgium...

A general partnership (Commanditaire Vennootschap op Aandelen/Société en Nom Collectif, Comm VA/SNC) is a form of company with at least two partners. All partners are each indefinitely liable for the partnership's debts. They have trader status if the objects are commercial, and the bankruptcy of the partnership may result in that of the partners.

There are no restrictions on how the partnership is organised in the articles of association, provided that the partners are still liable and that the shares cannot be transferred without limitation (in particular shares cannot take negotiable form).

This type of cooperative partnership is particularly worthwhile for members of the liberal professions, who, for ethical reasons, cannot limit their liability.

Limited Partnership

A limited partnership (Gewone Commanditaire Vennootschap/Société en Commandite Simple, Comm V/SCS) has two types of partner, who are subject to different legal regimes: general partners, who are jointly liable for the partnership's debts; and limited partners, who are bound only to the extent of the amount of capital they contribute towards the partnership.

The general partners direct and manage the company. The limited partners contribute towards the business financially but do not acquire the status of traders and cannot be involved in the running of the business. Any limited partner who takes on a business role in the company is considered a general partner. This type of company is suitable for people who wish to create a business but who do not have enough capital to start one.

There are two types of limited partnership:

  • A partnership limited by guarantee, whose status is similar to that of an ordinary limited partnership (apart from the special status of the limited partners). This is essentially a private partnership.
  • A partnership limited by shares, which functions in the same way as a company limited by shares (subject, among other things, to the same rules and requirements regarding capital).

In the partnership limited by shares, the partners' shares may take bearer form and are therefore freely negotiable. Shares in a partnership limited by guarantee can be transferred only with the consent of all the partners, unless otherwise specified in the articles of association.

Prepared using information supplied by ING Bank SA/NV