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Partnership agreement

 
photo:  (sxc.hu)
 

Basic information about the legal title of partnership agreement.

 
 
Legal regulation
The tiel of partnership agreement is embedded in the Civil Code - § 829 and consecutive. A partnership has no legal personality, so this means no competence to duties and discretions. All legal acts are made by members of the partnership. Members of the partnership are liable to third parties together and jointly. It is not possible to reduce this liability (any eventual reductions in partnership articles have no legal power at all).

Advantages
•        It is possible to pull together without establishing a new company
•        It is possible to form a partnership only for one project or for a certain period of time
•        No basic capital needed
•        Usually there is single-entry bookkeeping (partnership of natural persons)

Disadvantages
•        All members liable with all their property for partnership
•        Members are jointly liable for the partnership
•        Because there is no legal personality of the partnership, members have to act with their own names or with the name of one of them
•        If one member has VAT registration, then all members are obliged to have VAT registration as well

Links

 
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Added: 21.12.2009
 
 
 

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