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

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 notice that there is great 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 interest 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 CLP'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 in this instance:

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 310-6 § 1 and 2 of the Law of 10 August 1915 on commercial companies as amended ; #358-347* Decisions of the Partners and Articles of Association of the Partnership - CLP/SCS, May 26, 2021, Bertrand Mariaux; Partners' Decisions in the Absence of Statutory Provisions - CLP/SCS - #359-348*, May 27, 2021 Bertrand Mariaux.

* Podcast #361

*YouTube Video 350* 

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