Acting for and Against a General Partnership Before the Courts
22/06/2020

The Code of Companies and Associations (CCA) abolished the joint venture (société momentanée/tijdelijke vennootschap) and the silent partnership (société interne/stille vennootschap) as distinct corporate forms. The only recognised corporate form without legal personality is now the ordinary (or general) partnership (maatschap/société simple).

A general partnership is a contract between two or more partners concluded for the purpose of running a business for profit. The partners are jointly liable for debts and obligations incurred by the partnership. A general partnership may be set up to accomplish a specific project; in this case, the partnership automatically ends when the project is finished. It is furthermore possible to involve one or more silent partners, whose liability may not exceed the value of their contributions to the partnership. 

Since a partnership does not have legal personality it does not exist in law and cannot enter into contracts or act in court on its own behalf. Rather it must act through its partners or a manager representing the partners. As the partnership lacks legal personality, it cannot be the legal owner of any assets or rights acquired by the partners through the partnership. Nevertheless, personal creditors of the partners cannot seize assets acquired by the partners through the partnership, as these assets are allocated and used for a common purpose. In order to obtain satisfaction, they must await liquidation of the partnership, at which time the assets will be realised and the proceeds used to settle any outstanding claims.

As mentioned above, a partnership cannot act directly before the courts. The partners must unanimously authorise one of their number or a manager to act in court on their behalf. In addition, the partnership's creditors cannot serve a summons on the partnership, as it does not exist in law, and must sue the partners instead. As the partners are jointly liable, it should be sufficient to sue one of them. However, in this case, the creditor can only obtain an enforceable judgment against the assets of the partner in question and cannot seize the personal assets of the other partners.

The CCA facilitates acting in court for and against a partnership. 

If a general partnership is registered with the Crossroad Enterprise Database (CED), the manager can act on behalf of the partnership without having to identify the partners. In this regard, it is sufficient to indicate the name and address of the partnership (Art. 703 §2 Judicial Code).

In addition, if an authorised agent (mandataire général/algemeen lasthebber) is recorded with the CED, it is not necessary to produce proof that the agent is authorised to act in court on behalf of the partnership. The authorised agent can be a partner, a manager or a third party. In general, it is best to register the name of the manager or the partner responsible for representing the partnership. Any limitation on the powers of the authorised agent is not enforceable against third parties that are unaware of the limitation.

The abovementioned rules also benefit the creditors of a partnership. If a partnership is registered with the CED, creditors can validly take legal action against it by serving a summons at the address of the partnership, without having to serve process on the individual partners. However, in this case, any judgment will be enforceable only against the assets of the partnership, thus not against the personal assets of the partners which have not been contributed to or otherwise acquired by the partnership.

If an authorised agent is registered with the CED for a partnership, creditors can serve a summons on the authorised agent at the address of the partnership, and the authorised agent can represent the partnership in court. 

Voir aussi : NautaDutilh ( Mr. Dirk Van Gerven )

[+ http://www.nautadutilh.com]


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