Everything You Need To Know About The Limited Partnership
Limited Partnership : You have in mind for a long time that project that you would love to materialize. You have decided that the day has come to constitute your company and it is a decision that fills us with enthusiasm, but, at the same time, it generates countless doubts. In this post we will detail a type of company of the simplest and most economical to create, in addition to one of the most requested forms of business incorporation.
What Is A Limited Liability Company?
A Limited Company is a type of Commercial Company that is reduced to the share capital or assets in the name of the company. These assets or capital are made up of the contributions of the partners, which are divided into social, indivisible or cumulative partitions and must be paid at the time of incorporation. In the case of assets, they must have the monetary appreciation of all partners.
It is important to note that the contributions by the partners must have an economic value, being exempt from the contribution of works or services as a capital contribution to the company.
How Does The Limited Partnership Work?
Once the Limited Company has been created, it must have certain essential procedures for its implementation and be governed by the rules or regulations established by the Law.
Next, we will detail the most relevant aspects regarding the number of partners, the capital contributed and their responsibility for the operation of the company.
Types Of Partners:
Working partners: they play an essential role in the company, since they are involved in everything that entails the management and day to day of society. Capitalist Partners: are those who contribute capital to the company, act as investors and usually do not get involved with the management of the company.
Contributions from partners:
The social partitions correspond to the contributions that the partners have made to the company through goods or monetary capital. The greater the number of partitions a partner has, the greater his or her authority in society.
Transmission of partitions
Unless the bylaws establish otherwise, the partitions of the partners will be freely transferable between them, their descendants, ascendants, in favor of the spouse or to other companies of the same family nucleus, always having preference over third parties.
General Meeting of Partners
It is made up of the partners of the company and is of the utmost importance, since it is the way in which the decisions that will determine the direction of the society are deliberated.
For Sole Proprietorship Companies there is no such meeting. Decisions are made by the sole partner, but on record under his own signature.
To carry out the administration of the company, it must determine in the bylaws some of the following options:
- Sole administrator: when the administration of the company falls to a single person.
- Solidarity administrators: authorizes each partner to make decisions on their own, affecting the company and the rest of the partners.
- Joint administrators: decisions are approved by all partners through a prior agreement.
- Board of Directors: the responsibility will fall on three or more directors, who will be the ones who commit to making decisions about the company.
Advantages Of The Limited Company
- This type of partnership has limited liability, which means that, if losses occur in the company, the partners do not compromise their personal assets. That is, they can protect their belongings in case of insolvency.
- The incorporation of this company can be carried out with a contribution of $ 3000 of minimum capital per partner, and does not have a maximum capital limit.
- Its creation can occur even with a partner, which would be called a Single-Person Limited Company.
- With a society, the self-employed can establish a salary and deduct it as an expense.
- The constitution of an SL is simpler and cheaper than other companies.
- Compared to the individual entrepreneur, the SL gives a much more professional image.
- With an SL you can opt for bank loans or aid and subsidies, something that in many cases the self-employed lack.
Importance Of The Registered Office For The Limited Company
One of the fundamental requirements for the creation of any Company is to have a Registered Office, which will be reflected in the bylaws to successfully validate the public deed of incorporation. In addition, it will be the legitimate place for the fulfillment of the obligations of the company and also to carry out the exercise of its rights, as well as the establishment of its commercial headquarters.
The domicile in which a company is legally located has a great importance in the commercial field because it establishes the registry of the municipality in which it corresponds to record the background of the company, such as its constitution, dissolution, liquidation or any other reform.
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