Under Which Condition may a Partner be both a GP and LP in a Common Limited Partnership? - CLP/SCS V - #348-337*

To be as brief as the law is on this point, unless the partnership agreement provides otherwise, a partner may be both general partner (GP) and limited partner (LP). 

However this is subject to there being always at least one GP and one LP legally distinct from each other.

References: Article 310-1 (4), in fine of the law of 10 August 1915 on commercial companies as amended ; Partners’ Contribution in a Common Limited Partnership - CLP/SCS II - #345-334*, April 30, 2021.

*Podcast #348

*YouTube Video 337* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)
Contributor: Cédric Buisine, Avocat

Management of a Common Limited Partnership - Introduction - CLP/SCS IV - #347-336*

The management of a common limited partnership (CLP - société en commandite simple) resorts with one or more managers. These managers may or may not be general partners (GP(s) - associé commandité), as provided by the law. The managers are appointed in accordance with the provisions of the partnership agreement of the CLP. 

In the case of managers who are not GP(s), they are liable in accordance with general law applicable to public limited companies (sociétés anonymes) and European companies (sociétés européennes).

References: Article 310-2, §1 & 2 of the law of 10 August 1915 on commercial companies as amended; #344-333* What is a common limited partnership (CLP)? April 21, 2021, Bertrand Mariaux Avocats.

*Podcast #347

*YouTube Video 336* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Contributor: Cédric Buisine, Avocat

The Obligation to Keep a Register in a CLP/SCS - III - #346-335*

Keeping a register is a condition for the formation and continued existence of a common limited partnership (CLP - société en commandite simple). Three items must be included in the register. These are as follows:

1. a full copy of the current partnership agreement;

2. a list of all partners indicating;

• if they are natural persons, their:

  1. surnames;

  2. first names;

  3. professions; 

  4. private or professional addresses; 

  5. the partnership interests held by each.

• in the case of legal persons their:

  1. company names ;

  2. legal forms ;

  3. precise addresses; 

  4. registration numbers in the trade and companies register if the law of the State to which the company belongs provides for such a number; and

  5. the partnership interests held by each;

3. a mention of the transfers of partnership interests issued by the partnership and the date of the notification or acceptance of such transfers.

Any partner may have access to the register subject to the limitations provided for in the partnership agreement.

References: Article 310-1 (5) and the last paragraph of the law of 10 August 1915 on commercial companies as amended; #345-334* Partners’ Contribution in a Common Limited Partnership - CLP/SCS II, April 30, 2021, Bertrand Mariaux.

*Podcast #346

*YouTube Video 335* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Contributor: Cédric Buisine, Avocat

Partners’ Contribution in a Common Limited Partnership - CLP/SCS II - #345-334*

As mentioned previously, the question of contributions between partners is important in a corporate entity. In what manner is the question of partners' contributions addressed in a common limited partnership (CLP - société en commandite simple)? What form may partners' contributions take in a CLP - essentially a contractual entity? This issue is dealt with partly by law and in part contractually. 

The following three forms of contribution are possible:

1. in cash ;

2. in kind; and

3. in industry.

New partners may be admitted in accordance with the conditions laid down in the partnership agreement.

As with any other company, the CLP may issue equity, equity like instruments and debt instruments (including bonds, notes etc.).

References: Articles 310-1 (2), (3), (4) and 100-14, §1 of the law of 10 August 1915 on commercial company as amended;  L’apport - condition de fond à la création de la société ii #123-112, L’apport en numéraire - catégories d’apports - conditions de fond à la création de la société iii #124-113, L’apport en nature - des conditions de fond à la création de la société - iv #125-114, L’apport en industrie - des conditions à la création de la société (v) #126-115, Bertrand Mariaux Avocats.

*Podcast #345

*YouTube Video 334* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Contributor: Cédric Buisine, Avocat

What Is a Common Limited Partnership? - CLP/SCS I - #344-333*

Succinctly, as the law states, a common limited partnership (CLP - société en commandite simple) is a contract between one or more general partners (GP(s)) with one or more limited partners (LP(s)).

The GP(s) (associé(s) commandité(s))

The GP(s) is/are indefinitely, jointly and severally liable for the partnership's commitments. 

The LP(s) (associé(s) commanditaire(s))

The LP(s) only commit(s) a certain amount, constituting partnership interests, which may or may not be represented by instruments in accordance with the terms of the partnership agreement.

References: Article 310-1(1) of the law of 10 August 1915 on commercial companies as amended; Mentions obligatoires des statuts - SNC, SCS & sociétés civiles #113-102*, April 11, 2020, Bertrand Mariaux Avocats.

*Podcast #344

*YouTube Video 333* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Contributor: Cédric Buisine, Avocat

The Conversion of a SLP & the Question of Legal Personality - SLP XXIII - #343-332*

The conversion of a special limited partnership (SLP - société en commandite spéciale) into another entity may result in the creation of a legal personality if the SLP is converted into the following entities. 

The law recognises the following corporate entities as having a legal personality:

1. the general corporate partnership/unlimited company (société en nom collectif);

2. the common limited partnership (CLP - société en commandite simple) - the fact that the CLP has a legal personality is a major difference with the SLP;

3. the public company limited by shares (société anonyme);

4. the simplified joint company (société par actions simplifiées);

5. the corporate partnership limited by shares (société en commandite par actions);

6. the limited liability company (LLC - société à responsabilité limitée) and the simplified LLC (société à responsabilité simplifiée); and finally

7. The European company.

The formal and substantive requirements applicable to the new form of company must be met.

References : Articles 320-9 and 100-2 paragraph 1 of the law of 10 August 1915 on commercial companies as amended; some publications (in French) related to the creation of a company - quelques exposés sur certaines des conditions à la création d’une société: Quelques aménagements au principe du partage des bénéfices et des pertes - Conditions de fond à la création de la société (vii) ; Le partage des bénéfices et des pertes - conditions de fond à la création de la société (vi) ; L’apport en industrie - des conditions à la création de la société (v) ; L’apport en nature - des conditions de fond à la création de la société (iv) ; L’apport en numéraire - catégories d’apports - conditions de fond à la création de la société (iii) ; L’apport - condition de fond à la création de la société (ii) ; L'affectio societatis ou la vision commune des associés - condition de fond à la création de la société (i), Bertrand Mariaux Avocats.

*Podcast #343

*YouTube Video 332* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Contributor: Cédric Buisine, Avocat

The Appointment of a Provisional Administrator Replacing the GP - SLP XXII - #342-331*

We have seen previously that should the general partner (GP) of a special limited partnership (SLP - société en commandite spéciale) be unable to perform his functions, a provisional administrator (administrateur provisoire) shall be appointed (cf. The General Partner's Inability to Perform His Functions, #341-330*, April 26, 2021, Bertrand Mariaux). 

Some questions come to mind: firstly, how is the provisional administrator (administrateur provisoire) appointed? Secondly, what is the liability of the provisional administrator (administrateur provisoire)? Lastly, it is also important to say a few words on any possible objection to the appointment.

I - The Appointment of a Provisional Administrator Replacing the GP

The appointment of a provisional administrator is made at the request of any interested party: 

• addressed to the President of the Chamber of the District Court (Tribunal d'arrondissement) sitting in commercial matters;

  • who may appoint a provisional administrator, 

    • whether or not he is a partner, 

    • who alone shall perform urgent and simple administrative acts until the partners decide.

II - Liability of the Provisional Administrator

The provisional administrator shall only be responsible for the execution of his mandate.

III - Opposition to the Court's Order

Any interested party may oppose this court order. This objection shall be served on (cumulatively): 

1. the partnership;

2. the appointee; and

3. the person who requested the appointment.

The opposition shall be heard as a summary proceeding (en référé).

References : Article 320-8 of the Law of 10 August 1915 on commercial companies as amended;  The General Partner's Inability to Perform His Functions, #341-330*, April 26, 2021, Bertrand Mariaux.

*Podcast #342

*YouTube Video 331* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)
Contributor: Cédric Buisine, Avocat

Redemption or Reduction of Partner's Partnership Interests - SLP XX - #340-329*

The law provides that the partnership agreement of the special limited partnership (SLP - société en commandite spéciale) may authorise the redemption or reduction of the partnership interests of one or more partners under the following conditions.

1- Who Can Redeem or Reduce the Partnership Interests of One or More Partners?

• the management; or 

• the partners.

2- To What Extent Is this Redemption or Reduction of the Partnership Interests of One or More Partners Possible?

• in whole; or

• in part.

3- How Can the Redemption or Reduction of the Partnership Interests of One or More Partners Occur?

The redemption or reduction of partner's partnership interests may be carried out at the request of one or more partners.

4- In Addition to the Above Conditions, How Are the Terms of a Redemption or Reduction of the Partnership Interests Determined? 

The terms of a redemption or reduction are contractually determined.

References : Article 320-7, §4 of the law of 10 August 1915 on commercial companies as amended ; #339-328* Enforceability of transfers and dismemberments (démembrements) of partnership interests - SLP - XIX, April 22, 2021, Bertrand Mariaux; #338-327* Partnership Interests: Transfer, Pledge and Dismemberment (Démembrement) - SLP XVIII, April 21, 2021, Bertrand Mariaux.

*Podcast #340

*YouTube Video 329* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Contributor: Cédric Buisine, Avocat

Enforceability of Transfers and Dismemberments (démembrements) of Partnership Interests - SLP XIX - #339-328*

The law provides that transfers and dismemberments (démembrements) of partnership interests are only valid against the special limited partnership (SLP - société en commandite spéciale) and third parties if they have been notified to or accepted by the partnership.

Similarly, the law further states that transfers and dismemberments (démembrement) of partnership interests cannot have any effect vis-à-vis third parties with regard to corporate commitments made prior to their publication, except where the third party was aware of them, or could not have been unaware of them.

References: Article 320-7, §3 of the law of 10 August 1915 on commercial companies as amended; #338-327* Partnership Interests: Transfer, Pledge and Dismemberment (SLP), April 21, 2021, Bertrand Mariaux.

*Podcast #339

339-328* Enforceability of transfers and dismemberments of partnership interests (SLP) *Article #339-328* *Podcast #339 *YouTube Video 328*: https://youtu.be/Mf_uG358L7E . . . . . . . . #corporate , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #MissionDriven , #MissionDrivenVenture , #alternativeinvestment , #limitedpartnership , #LP , #SpecialLimitedPartnership , #SLP , #SCSp , #sociétéencommanditespéciale, #DFI To see this publication, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum.

*YouTube Video 328* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Contributor: Cédric Buisine, Avocat

Partnership Interests: Transfer, Pledge and Dismemberment - SLP XVIII - #338-327*

Let us consider the question of transfer, dismemberment (démembrement), and pledge of partnership interests in a special limited partnership (SLP - société en commandite spéciale).

This question is governed by almost identical rules for limited and general partners (GPs) (i). The only exception is that the rules of general law (droit commun) are more restrictive for GPs' partnership interests (ii). We may also notice that there is still a great deal of room for contractual freedom.

I - Partnership Interests: Transfer, Pledge and Dismemberment (démembrement) - Similar Rules for GPs and Limited Partners (LPs)’ Partnership Interests

Whether they are partnership interests of LPs or GPs, they may only be transferred, dismembered or pledged in accordance with the terms & conditions and in the form provided for in the partnership agreement, failing which the operation shall be null and void.

If the partnership agreement is silent on the above, and except in the case of a transfer other than by reason of death, the dismemberment (démembrement) and pledging of an LP's partnership interests require the approval of the GP(s).

In the same case (as in the previous paragraph), but this time for the GP's partnership interest(s), additional steps are required. 

II - GP’s Partnership Interest(s): Transfer, Pledge and Dismemberment (démembrement) - Restrictions

As mentioned above, in the absence of provisions to the contrary in the SLP's partnership agreement, and for a transfer other than a transfer by reason of death, a dismemberment (démembrement) and pledging of GPs' partnership interests requires this time:

1. the approval of all the partners; and

2. that the latter decide in the same manner as when amending the partnership agreement.

References: Article 320-7 §1 & 2 of the Law of 10 August 1915 on commercial companies as amended ; #336-325* Partners' Decisions and Partnership Agreement (SLP), April 19, 2021, Bertrand Mariaux; #337-326* What About Partners' Decisions in the Absence of Statutory Provisions in an SLP? April 20, 2021, Bertrand Mariaux.

*Podcast #338

338-327* Partnership Interests: Transfer, Pledge and Dismemberment (SLP) *Article #338-327* *Podcast #338 *YouTube Video 327* . . . . . . . . #ImpactInvesting , #corporate , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #MissionDriven , #MissionDrivenVenture , #alternativeinvestment , #limitedpartnership , #LP , #SpecialLimitedPartnership , #SLP , #SCSp , #sociétéencommanditespéciale, #DFI To see this publication, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum.

*YouTube Video 327* 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)
Contributor: Cédric Buisine, Avocat