Limited partnership
A limited partnership is one of the forms of commercial companies in the Republic of Croatia, where two or more persons join together for the permanent performance of business activities under a common company name. At least one member (general partner – komplementar) is liable for the obligations of the company jointly and unlimitedly with their entire assets, while at least one member (limited partner – komanditor) is liable only up to the amount of their investment in the company.
The company is established by a partnership agreement , which must specify the members who hold the position of general partners as well as those who are limited partners. The court register must contain information on the limited partners and the amount of their contributions; however, upon the registration of the company, only the number of limited partners is published, not their names or investment amounts.
MANAGEMENT OF THE COMPANY – The company is managed exclusively by the general partners. Limited partners do not have the authority to manage company affairs. A limited partner cannot oppose the decisions or actions of the general partners, except for those that are beyond the scope of the company’s ordinary business activities.
PROFIT AND LOSS DISTRIBUTION – One-third of the company’s annual profit is distributed among the members in proportion to their share in the company’s capital. However, the limited partner’s share of the profit is credited to their investment until it reaches the amount they committed to contributing in the partnership agreement. A limited partner bears losses only up to their investment in the company’s capital and any unpaid portion of their agreed-upon contribution.
LIABILITY OF A LIMITED PARTNER – A limited partner does not bear liability for the company’s obligations if they have fully paid their agreed investment. If they fail to do so, they are personally and jointly liable to creditors, but only up to the outstanding amount of their committed contribution.
RELATIONSHIP BETWEEN LIMITED PARTNERS AND CREDITORS – For creditors, the registered amount of the limited partner’s investment in the court register is the legally relevant figure unless the company publicly announces or otherwise notifies creditors that the investment is higher.
If a limited partner withdraws their investment, it is considered as if it was never paid from the perspective of creditors. The same applies if a limited partner participates in profit distribution while their invested capital has been reduced due to losses.
NEW PARTNERS – A person who later joins the company as a limited partner is also liable for the obligations that the company assumed before their admission.
TERMINATION OF A LIMITED PARTNERSHIP – The termination of a limited partnership follows the rules applicable to a general partnership. A limited partnership may be dissolved due to:
the expiration of its agreed duration, a decision of the partners, a final court ruling, the opening of bankruptcy proceedings against the company or a partner, the death of a partner (if specified in the partnership agreement), or the withdrawal of a partner or their creditor.
It is important to note that the death or dissolution of a limited partner (if they are a legal entity) does not result in the dissolution of the company.
