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Limited Partnership

The limited partnership is a company of a highly personal nature, which is characterised by the co-existence of general partners, who have unlimited liability for the company’s debts and participate in the management of the company, and of limited liability partners whose liability is limited to the capital contributed or committed.

The same as occurred with the general partnership, the limited partnership was widely developed in the last century due to the characteristics of the limited liability partner.

However, the existence at the present time of other forms of business that have incorporated these characteristics has rendered the incorporation of limited partnerships an infrequent event.

This kind of company has many points in common with the general partnership and, in this regard, the general partners are subject to the same rights and obligations as established in that form, with the main differences being marked by the existence of limited liability partners, which lends it a degree of a capitalist character.

The limited partnerships are divided into "comanditarias simples" (commandites) and "comanditarias por acciones" (joint-stock companies), with the latter being characterised by the fact that the participation of the limited liability partners is represented by shares. When there are only limited liability partners, at least one of them will be liable personally for the company’s debts as a general partner. The rules governing public limited companies are applicable to the joint-stock companies, and such companies must have a minimum stock capital of 60,000 € at the time of incorporation, with at least 25% of the par value of the shares paid up.

The incorporation of the limited partnership is formalised in a public deed to be registered in the Mercantile Registry. The deed must contain the same details as in the case of the general partnership.

The commandites are not obliged to audit their annual accounts or to deposit them in the Mercantile Registry, unless, on the closing date of the business year, all of their limited liability partners are Spanish or foreign companies.

The joint-stock companies must audit their accounts and deposit them in the Mercantile Registry. The same rules are applied to them as in the case of the public limited companies. The limited partnerships pay tax under the Company Tax system and do not have access to the Simplified Regime or to the Equivalence Surtax under the Value Added Tax. The rate applicable under the Company Tax system is 30%. There is a special tax regime within the Company Tax system for small companies, which are those companies whose net turnover does not exceed eight million euros, whereby the first 300,000 € of profit are subject to a reduced tax rate of 25%.

The legal relations of these partnerships are regulated by articles 145 to 150 of the Commercial Code, Act 19/1989, July 25, 1989, on the partial reform and adaptation of business legislation, and articles 210 to 215 of the Mercantile Registry Regulation, with respect to their registration.

  • Incorporation agreement formalised in a public deed and then registered in the Mercantile Registry.
  • The name of the company will be comprised by the names of all of the general partners or some of them, in which case the expression "y Compañía" (& Company) must be added, while all of such company names must include the reference "Sociedad en comandita" (Limited Partnership). The joint-stock companies may use an objective name, to which they must add the expression "Sociedad en comandita por acciones" (Joint-Stock Company) or its abbreviation "S. Com por A."
  • The names of the limited liability partners may not appear in the name of the company.
  • The management of the company must necessarily be entrusted to the general partners, who will have the same powers, rights and duties as the directors in a general partnership.
  • The liability of the limited liability partners with respect to the company’s debts is limited to the contribution made or, if applicable, committed.
  • The general partners are subject to the same rights and obligations as in the case of a general partnership. Spanish solicitors in London

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