The partners’ personal liability

There is, however, one notable drawback to the formation of a partnership, and this has everything to do with liability. Unlike corporate entities, i.e. private limited companies (BV) and public limited companies (NV), as well as associations, cooperative societies, mutual insurance associations, and non-profit-making foundations, partnerships do not possess what is called ‘legal personality’. This means, for example (with the exception of  general partnerships, or VOFs), that partnerships do not have any capital of their own. The partners enter into contracts on the partnership’s behalf and, in doing so, are liable with their own personal assets. In other words, the basic rule is that they are personally liable for any debts incurred by the partnership.

It is precisely this personal connection that makes it so important to make clear, written arrangements with your partner (or partners).

  • What happens, for example, if you fall out with your partner or if you can no longer work together for whatever reason?
    What happens if you fall ill or your partner falls ill?
    How should the partnership’s assets and liabilities be distributed if one partner wants to stop but the other partner wants to carry on?
    Can you continue the business if your partner leaves?
    How can you place a figure on the value of the business?

You can prevent a great deal of argument – and save a lot of time – by making clear arrangements in advance. And it’s worth seeking expert legal advice rather than simply downloading a document that you happen to find on the internet.

Why should you contact our company law lawyers?

Are you thinking of either launching or closing down a professional partnership (maatschap), a general partnership (vennootschap onder firma, or VOF) or a limited partnership (commanditaire vennootschap, or CV), or perhaps continuing the business on your own? Do you need advice on how to draft a new partnership agreement or on how to interpret the terms of an existing agreement? Are you perhaps involved in a dispute with one or more of your partners, or have you – or has one of your partners – been held jointly and severally liable by a creditor? Whatever questions you may have, you’re welcome to put them to one of our specialist team of lawyers at RWV Advocaten. We’ll be pleased to offer you practical advice and whatever assistance you may need.

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