1 guide on the topic “General Partnership”: legal obligations, concrete procedures, costs and deadlines.
A general partnership (SNC) brings together partners who are jointly and fully liable for its debts. Together with the SComm, it forms the family of partnerships of persons. This page helps partners weigh its strengths and risks before choosing it.
The Code of Companies and Associations links this form to the simple company. Unlike that form, however, it has legal personality. It can therefore sign contracts, open a bank account and go to court in its own name.
The SComm works on the same model, with two categories of partners. Active partners manage the business and answer for its debts without limit. Silent partners provide funds and risk only their contribution. However, they must not perform any act of management. Otherwise, they become jointly liable for the resulting commitments.
Creation remains simple compared with an SRL. Here are the key points.
The partners then file the deed of incorporation with the registry of the enterprise court. Legal personality arises upon that filing, along with the enterprise number. Finally, an extract appears in the annexes of the Belgian Official Gazette. This simplicity still calls for careful drafting. The articles cover management, the entry of new partners and what happens to shares on death. In practice, they often make any transfer of shares subject to the other partners' consent.
In a general partnership, each partner puts all personal assets on the line. An unpaid creditor can claim the entire debt from a single partner. That partner then turns to the others for their share. Take a fictitious example: three friends open a restaurant that leaves 90,000 euros of debt. A supplier can then demand everything from the wealthiest of them.
This form therefore mainly suits partners who know each other well, for a low-risk activity. As soon as potential debts grow, an SRL protects private assets better. The SComm also serves family succession: parents remain active partners, while children join as silent partners.
Like any company with legal personality, a general partnership pays corporate income tax. The standard rate stands at 25%. However, an SME may qualify for a reduced 20% rate on a first slice of profit, subject to conditions. Active partners normally fall under the social status of the self-employed.
Our guide to the SNC and the SComm details each form. For comparison, also read the simple company and our SRL vs SA comparison. Company publications are available on the FPS Justice eJustice website.
