Limited partnership (k.d.)
A limited partnership in Sloveniamay be established and registered by at least two local or foreign individuals or businesses who decide to perform a business activity together. A limited partnership is established by a contract of members.
Advantages and disadvantages of registering a Limited partnership in Slovenia
The advantages of registering a Limited partnership in Slovenia are:
- There are no fixed minimum share capital;
- a partner can invest their subscribed contribution in services;
- it enables the formation of a company in which some partners invest only capital (limited partner), while others invest only their work (general partner).
The disadvantages of registering a Limited partnership in Slovenia are:
- The general partner is liable for the company's obligations;
- potential conflict of interest between different types of partner;
- more risky form of legal organisation than a capital-based company (e.g. LLC).
There is no fixed minimum share capital for a limited partnership in SLovenia. A limited partner may invest money, items or property rights and services that can be valued. A limited partner's investment must be expressed in monetary terms, so it can be entered in the Companies Register and also constitutes the amount of the limited partner's liability for the partnership's obligations.
The limited partnership's name must contain the surname (in the case of individuals) or firm (in the case of businesses) of at least one general partner, and the abbreviation k.d. (limited partnership). The surnames of limited partners cannot be included in the company name. Example: the same restrictions apply as in the case of an LLC.
Relationships between partners
Legal relationships between partners are regulated by a contract of members. The limited partner is not entitled to represent the company and may act only as a procurator.
Profit is distributed to the limited partner up to the amount of the invested capital; in the case of losses, the limited partner may only be liable up to the amount of his/her invested capital.
The legal relationships between partners are regulated by contractual freedom; however, the following conditions cannot be modified in a contract of members:
- a limited partner is not entitled to manage the company's business;
- a limited partner cannot oppose general partners' decisions that apply to the regular activities of the general partners;
- This rule is strict. If violated the limited partner is liable for the company's obligations with all his/her own assets; This means the position of the limited partner is equal to the general partner's position; despite representation being prohibited, the limited partner may be given power of attorney or special authorisation for representation, which requires the general partner's consent.
The coverage of loss and distribution of profit are subject to the same rules as in the case of an unlimited liability company.
The company's business is managed by general partners. If the business is managed by a limited partner, then the limited partner is held liable for the company's obligations to the same extent as the general partners.
The company is represented by general partners. A limited partner may not represent the company; however, s/he may be given power of attorney or special authorisation.
Limited partnerships (k.d.) are established at a notary, where the following information must be provided:
- company name;
- head office and business address;
- founders' identification data (personal name, personal identification number, permanent address for individuals, registered name of the company, identification number and business address of legal entities, tax number for foreign natural and legal entities);
- it is stated whether partners are limited or general partners;
- type and scope of liability of company's obligations (in the case of a general partner: liable with all personal assets; in the case of a limited partner: not liable);
- the amount invested if the partner is a limited partner;
- identification data and representation type (general partner, potential manager or procurator);
- type of representation (independently or jointly);
- limitations on representation authorisations;
- main activity code.
Based on the data provided, the notary prepares all the required documents:
- contract of members in the form of a notarial record or personal document in which all the signatures of the partners are certified;
- if the company is represented by managers and partners, a decision on the appointment of managers is required.
The founders must be present at the compiling and signing of all documents (individuals or authorised business representatives). Each founder may be represented by an authorised representative. In the case of the establishment of a company by contract in the form of a notarial record, the authorisation for representation should be in the same form, i.e. in the form of a notarial record.
The following procedure may be carried out only by a notary. Based on the decision of the register court on the registration of the company in the Companies Register, the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES) determines the main activity code and company identification number.
Legislation that applies to limited partnerships: Articles 135 to 151 of the Companies Act (ZGD-1-UPB3)
A dormant partnership may be founded by a contract based on which a dormant partner makes a capital contribution in another enterprise – the holder of the dormant partnership - thus obtaining the right to participate in the enterprise’s profit.
The relationship between the holder of the dormant partnership and the dormant partner are agreed in a contract. The law stipulates that the name of the dormant partner may not be used in the name of the company of the holder of the dormant partnership; otherwise, the dormant partner is liable for the company's obligations.
Dormant partnerships can be terminated in the following ways:
- At the end of the period for the duration of which it was founded;
- by an agreement between the holder and dormant partner;
- if the activities of the holder of the dormant partnership are terminated;
- by the death or termination of operations of the holder of dormant partnership, except when the contract stipulates otherwise;
- by the dormant partner's resignation;
- based on a court decision.
If a dormant partnership does not terminate its operations due to the bankruptcy of the holder of the partnership, the latter should pay the dormant partner the input capital, unless otherwise agreed by contract.
A limited partnership in which the sole general partner is a company in which there are no personally liable partners, or in which all the general partners are such companies (e.g. LLC), is a dual company.
A dual company is a limited partnership in which the sole general partner is a company in which there are no personally liable partners or all partners are general partners of the company.
In legal transactions, a dual company appears as a dual company, i.e. the company of the general partner and the limited partnership, e.g.:
XYZ d.o.o., Ljubljana, Ljubljanska cesta 1& Co. XXX, k.d. Ljubljana, Ljubljanska 11
All business documents must indicate the dual company's enterprise and the names and surnames of members of the management board of the general partner in the dual company. All business contracts of the dual company must be signed by the natural entity and the registered name of the general partner must be added.
Legislation that applies to dual companies: Articles 152 to 157 of the Companies Act (ZGD-1-UPB3).