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

The General Partner's Inability to Perform His Functions - SLP XXI - #341-330*

As mentioned previously, the general partner (GP - associé commandité) is an indispensable part of the partnership agreement of the special limited partnership (SLP - société en commandite spéciale) - the same applies to the common limited partnership (CLP - société en commandite simple).

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

Thus - and if the GP is a sole GP - it is important to consider the possibility of :

• his death;

• its dissolution (for legal person);

• legal incapacity;

• dismissal from office;

• resignation; 

• impediment; 

• bankruptcy; or

• any other situation affecting the rights of creditors.

 If the partnership agreement stipulates that the SLP (or CLP for that matter) continues, the GP must necessarily be replaced. But what if there are no specific provisions in the partnership agreement in this regard? A provisional administrator (administrateur provisoire) shall be appointed.

Going further : Article 320-8 of the law of 10 August 1915 on commercial companies as amended ;  #321-310* What Is a Special Limited Partnership (Société en Commandite Spéciale), January 14, 2021, Bertrand Mariaux Avocats.

*Podcast #341

*YouTube Video 330* 

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

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