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

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

The Partners' Share in the Profits and Losses - SLP XV - #335-324*

The special limited partnership (SLP - société en commandite spéciale - one of the Luxembourg partnerships) offers real flexibility to its partners, due to its contractual nature.

Thus, distributions and reimbursements to partners and the conditions under which the SLP may request their restitution are governed by the partnership agreement. 

Therefore, as the law provides, unless otherwise stipulated in the partnership agreement, the share of each partner in the profits and losses of the SLP is in proportion to his partnership interest.

References: Article 320-5 of the law of 10 August 1915 on commercial companies as amended ; What Is a Special Limited Partnership (Société en Commandite Spéciale) January 14, 2021, #321-310*, Bertrand Mariaux.

*Podcast #335 (see Link on LinkedIn Article)

*YouTube Video 324* 

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 Possibility for a Limited Partner to Act in the Management of an SLP - SLP XIV - #334-323*

In our previous publications we stated that in a special limited partnership (SLP - société en commandite spéciale) one of the specific attributes of the limited partner (LP) is that he is prohibited from performing acts of management with respect to third parties.

If he were to disregard this prohibition, the LP would be held indefinitely, jointly and severally liable to third parties for all the company's commitments in which he had participated.

However, it will be possible for an LP: 

1. to act as a member of a management body; or 

2. to act as a proxy for a manager of the SLP (a manager who may also be general partner as well); or

3. to be granted a corporate signature power by the latter even when acting as a representative of the company.

The LP will be able to act in this manner without incurring joint and several liability vis-à-vis third parties for the company's commitments, provided that the representative capacity in which he is acting is indicated, as required by law.

References: Article 320-4, §6 of the law of 10 August 1915 on commercial companies as amended; #213-202* De la possibilité pour un associé commanditaire d’agir dans la gestion d’une SCSp, 20 juillet 2020, Bertrand Mariaux; #331-320*-Two Specific Features of the Limited Partner-SLP XI-March 24, 2021, Bertrand Mariaux; #328-317-The Liability of the Managers of an SLP (Excl. GP)-SLP-VIII, March 3, 2021, Bertrand Mariaux; #211-200* Responsabilité de l’associé commanditaire (limited partner) et acte de gestion (SCSp), 18 juillet 2020, Bertrand Mariaux; #210-199* Deux particularités de l’associé commanditaire (limited partner) - SCSp, 17 juillet 2020, Bertrand Mariaux.

*Podcast #334

334-323* - The Possibility for a Limited Partner to Act in the Management of an SLP - SLP XIV *Article #334-323* *YouTube Video 323* . . . . . . . .

*YouTube Video 323*

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

Liability of the Limited Partner and Management Act - SLP XII - #332-321*

We mentioned earlier that the limited partner (associé commanditaire) may not perform any act of management with respect to third parties in a special limited partnership (SLP - société en commandite spéciale). It is interesting to note that, as in the case of a common limited partnership (société en commandite simple), the general partner (associé commandité) is in principle jointly and severally liable for the commitments of the SLP.

If, however, a limited partner was to perform any act of management despite the prohibition set out in the foregoing principle, he would be held indefinitely, jointly and severally liable with the SLP, vis-à-vis third parties, for all the commitments of the company in which he had participated.

Finally, the limited partner will also be held jointly and severally liable with the SLP, indefinitely, vis-à-vis third parties and creditors, for commitments in which he has not participated, if he has habitually performed acts of management for the said commitments. We shall see how the concept of management act fits into the framework by addressing in particular what does not constitute a prohibited management act for the limited partner.

References: articles 320-1 (1), 320-4 § 2, 3 et 4 of the law of 10 August 1915 on commercial companies as amended ;  Two Specific Features of the Limited Partner-SLP XI-#331-320*, March 24, 2021, Bertrand Mariaux ; #200-189* Qu’est-ce qu’une société en commandite spéciale ? July 7, 2020, Bertrand Mariaux.

*Podcast #332

Liability of the Limited Partner and Management Act - SLP XII *Article #332-321* *YouTube Video 321| . . . . . . . . #ImpactInvesting , #corporate , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #MissionDriven , #MissionDrivenVenture , #alternativeinvestment , #limitedpartnership , #LP , #SpecialLimitedPartnership , #SLP , #SCSp , #sociétéencommanditespéciale, #DFI https://mariauxavocats.com/vademecum/f5xrypc59rtxbtkfggffdkzbwy49cr https://www.linkedin.com/pulse/liability-limited-partner-management-act-slp-xii-bertrand-mariaux To see this publication, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum.

*YouTube Video 321* 

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

Acts of Management Going Beyond the Corporate Purpose and Legal Representation - SLP X - #330-319*

As we have already pointed out in the case of common limited partnerships (société en commandite simple), these are classic company law provisions. The special limited partnership (SLP, société en commandite spéciale in French) will be bound by the acts of its managers even if these acts exceed the corporate object. 

However, the SLP shall not be bound if it proves that the third party: 

(i) knew that such act exceeded the objects of the company; or 

(ii) could not have been unaware of it under the circumstances.

Moreover,  the managers represent the company in relation to third parties and in court, either as plaintiff or defendant.

To go further: article 320-3, paragraphs 5 and 6 of the law of 10 August 1915 on commercial companies as amended; #209-198* Des actes de gestion dépassant l’objet social et la représentation en justice (SCSp); #329-318* Powers of the Managers & Delegation - SLP-IX, Bertrand Mariaux; with regard to the société en commandite simple; article in French  #188-177* Actes dépassant l’objet social de la SCS et représentation judiciaire - Gérance, Bertrand Mariaux.

*Podcast #330

330-SLP-X-Acts of Management Going Beyond the Corporate Purpose and Legal Representation *Article #330-319* *Podcast #330 *YouTube Video 319* . . . . . . . . #ImpactInvesting , #corporate , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #MissionDriven , #MissionDrivenVenture , #alternativeinvestment , #limitedpartnership , #LP , #SpecialLimitedPartnership , #SLP , #SCSp , #sociétéencommanditespéciale, #DFI https://mariauxavocats.com/vademecum/z7mfne2zcs5pce88krg4257f3tb65j https://www.linkedin.com/pulse/acts-management-going-beyond-corporate-purpose-legal-mariaux To see this publication, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum.

*YouTube Video 319*

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

Editors: Hannah Seulgee Jung & Nikolai Shillinglaw

The Liability of the Managers of an SLP (Excl. GP) - SLP VIII - #328-317

It is interesting to remember that general partners (GPs - associés commandités) have unlimited, joint and several liability for all obligations incurred by the special limited partnership (SLP - société en commandite spéciale). What about the liability of managers who are not GPs? In this case, general law (droit commun) provisions apply. This implies that these managers are liable to the SLP for the execution of the mandate they have received and for any faults committed in the course of their management.

Joint & Several Liability Towards Third Parties and Towards the Company for Breaches of the Law as well as the Partnership Agreement

The aforementioned managers are jointly and severally liable either:

1. towards the company;

2. towards any third party;

for any damage resulting from infringements of: 

1. the law of 10 August 1915 on commercial companies as amended; or 

2. the limited partnership agreement.

Release From Liability 

The said managers are discharged from liability for offences in which they did not take part under two cumulative conditions: 

1. if no fault is attributable to them; and

2. if they have reported such offences to the management board and the nearest general meeting of shareholders following the commission of the offence(s).

References: Articles 320-3 §2, 320-1 (1) and 441-9 of the law of 10 August 1915 on commercial companies as amended; #207-196* La responsabilité des gérants d’une SCSp (hors associé commandité), 13 juillet 2020, Bertrand Mariaux; the common limited partnership (société en commandite simple - SCS) is subject to the same rules as those mentioned in this article - in this respect, see publication : La responsabilité des gérants de la SCS (hors associés commandités) #185-174*, 22 juin 2020, Bertrand Mariaux.

*Podcast #328

The Liability of the Managers of an SLP (Excl. GP)-SLP-VIII *Article #328-317* *YouTube Video 317* . . . . . . . . #ImpactInvesting , #corporate , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #MissionDriven , #MissionDrivenVenture , #alternativeinvestment , #limitedpartnership , #LP , #SpecialLimitedPartnership , #SLP , #SCSp , #sociétéencommanditespéciale, #DFI https://mariauxavocats.com/vademecum/mcjzl8thhl7wd9wd6bynysxzarmanx https://www.linkedin.com/pulse/liability-managers-slp-excl-gp-slp-viii-bertrand-mariaux To see this publication, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum.

*YouTube Video 317* 

328-317-The Liability of the Managers of an SLP (Excl. GP)-SLP-VIII*Article #328-317*: https://mariauxavocats.com/vademecum/mcjzl8thhl7wd9wd6bynysxzarmanx *...

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

Editor: Nikolai Shillinglaw

Management of an SLP/SCSp - Introduction - SLP VII - #327-316*

As in the case of a Luxembourg common limited partnership (CLP, société en commandite simple), the management of a Luxembourg special limited partnership (SLP, société en commandite spéciale) belongs to one or more managers, whether general partners (associés commandités) or not. As in the case of a CLP, the managers of the SLP are appointed in accordance with the provisions of the partnership agreement. 

Managers who are not general partners are liable to the SLP, in accordance with general law provisions (droit commun), for the mandate they have received and for any faults committed under their management. 

References: Article 320-3, § 1, 2 and 441-9, § 1 of the law of 10 August 1915 on commercial companies as amended; #206-195* La gérance d’une SCSp - Introduction, 13 juillet 2020, Bertrand Mariaux; and by way of comparison (the same rules) to CLPs in this matter: La gérance des SCS - introduction #184-173*, 21 juin 2020, Bertrand Mariaux.

*Podcast #327

Management of an SLP / SCSp - Introduction-VII *Article #327-316* *YouTube Video 316* . . . . . . . . #ImpactInvesting , #corporate , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #MissionDriven , #MissionDrivenVenture , #alternativeinvestment , #limitedpartnership , #LP , #SpecialLimitedPartnership , #SLP , #SCSp , #sociétéencommanditespéciale, #DFI https://www.linkedin.com/pulse/management-slp-scsp-introduction-vii-bertrand-mariaux To see this publication, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum.

*YouTube Video 316*

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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

Domicile and presumption of central administration - SLP V - #325-314*

As is the case with any commercial company, the domicile of a special limited partnership (SLP - or société en commandite spéciale, SCSp) is at its head office.

The central administration is deemed to be located at the registered office of the company as stated in the SLP's partnership agreement.

Said presumption is simple (rebuttable - réfragable), i.e. it can be rebutted with proof to the contrary. 

References: Articles 320-1 (7) and §3 of article 100-2 of the law of 10 August 1915 on commercial companies as amended; #204-193* Domicile et présomption d’administration centrale (SCSp), July 11, 2020, Bertrand Mariaux.

*Podcast #325

Domicile and presumption of central administration - SLP #325-314* *Article #325-314* *Podcast #325 *YouTube Video 314* https://www.linkedin.com/pulse/domicile-presumption-central-administration-slpscsp-mariaux . . . . . . . . #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 314*

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

Editor: Nikolai Shillinglaw

Partners' contributions, issue of debt securities and impact on legal personality - SLP II - #322-311*

As you may know, the société en commandite spéciale (SCSp) or special limited partnership (SLP) does not have a legal personality.

We indicated in a previous publication (in French) that the SLP has no legal personality. The SLP does not constitute a legal individuality separate from its partners. Does this have an impact on the form that contributions may take, or on the possibility of issuing debt securities for an SLP?

The absence of legal personality does not affect the different forms of contributions to an SLP or the issue of debt securities. 

Contributions in cash, in kind or in industry are possible. Also, in accordance with the contractual nature of the SLP, all new contributions (admission of new members - not in relation to the transfer of partnership interests) are carried out in accordance with the terms and conditions set out in the partnership agreement. 

The issue of debt securities will of course be possible as for any other Luxembourg company.

References: Articles 320-1 (2), (3) and (4), 100-14 §1 of the law of 10 August 1915 on commercial companies as amended; Société en commandite spéciale et caractéristiques de la personnalité morale des sociétés #109-98*, April 7, 2020, Bertrand Mariaux; Apports des associés, émission de titres de créance et incidence sur l’absence de personnalité juridique (SCSp) - #201-190*, July 8, 2020, Bertrand Mariaux; Toute société peut-elle émettre des obligations ? L’émission de valeurs mobilières (i) - #129-118* , April 27, 2020, Bertrand Mariaux. 

*Podcast #322:

Partners' contributions, issue of debt securities and impact on legal personality (SCSp / SLP) #322-311* *Article #322-311* *YouTube Video 311* . . . . . . . .

*YouTube Video 311*: 

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)