Are general partners required to be individuals? Can an organization become a member of a partnership?

Who are the members of a partnership company?

According to Clause 30, Article 4 of the Law on Enterprises 2020, it is stipulated as follows:

“Member partnership company includes general partners and capital contributing members.”

Thus, members of a partnership include:

– Partnership member;

– Members contribute capital.

Are general partners required to be individuals?

Pursuant to Clause 1, Article 177 of the Law on Enterprises 2020, the regulations on partnerships are as follows:

“1. A partnership is an enterprise in which:

a) There must be at least 02 members who are joint owners of the company, doing business together under a common name (hereinafter referred to as general partners). In addition to general partners, the company may have additional capital contributing members;

b) General partners must be individuals, responsible with all their assets for the company’s obligations;

c) Capital contributing members are organizations and individuals and are only responsible for the company’s debts within the amount of capital they have committed to contribute to the company.”

According to the above regulations, a general partner must be an individual, responsible with all of his or her assets for the company’s obligations. Thus, partnership members must be individuals.

What are the rights restrictions for general partners?

According to Article 180 of the Law on Enterprises 2020, regulations on restrictions on rights for general partners are as follows:

“Article 180. Limitation of rights of general partners

1. Partnership members are not allowed to own private enterprises; Not allowed to be a general partner of another partnership unless otherwise agreed by the remaining partners.

2. Partnership members are not allowed to act on their own behalf or on behalf of others doing business in the same industry or line of business as the company for personal gain or to serve the interests of other organizations or individuals.

3. A general partner is not allowed to transfer part or all of his/her capital contribution in the company to another organization or individual without the approval of the remaining general partners.”

Thus, for partnership members, there will be certain limitations, specifically the following regulations must be complied with:

– Not allowed to own a private enterprise; Not allowed to be a general partner of another partnership unless otherwise agreed by the remaining partners.

– Do not act in the name of an individual or on behalf of another person doing business in the same industry or line of business as the company for personal gain or to serve the interests of other organizations or individuals.

– Do not transfer part or all of your capital contribution in the company to other organizations or individuals without the approval of the remaining partners.

Can an organization become a member of a partnership?

Pursuant to Clause 30, Article 4 of the Law on Enterprises 2020, members of a partnership include general partners and capital contributing members. At the same time, according to Clause 1, Article 177 of the Law on Enterprises 2020, the regulations on partnerships mentioned above, partners must be individuals and capital contributing members must be organizations and individuals.

Thus, an organization cannot be a general partner, but can still be a capital contributing member in a partnership.

What are the rights and obligations of capital contributing members in a partnership?

In Article 187 of the Law on Enterprises 2020, the rights and obligations of capital contributing members are specifically stipulated as follows:

– Capital contributing members have the following rights:

+ Participate in meetings, discuss and vote at the Board of Members on amending and supplementing the company Charter, amending and supplementing the rights and obligations of capital contributing members, reorganizing and dissolving the company and other contents of the company Charter directly related to their rights and obligations;

+ Receive annual profit shares corresponding to the capital contribution ratio in the company’s charter capital;

+ Be provided with the company’s annual financial report; has the right to request the Chairman of the Board of Members and general partners to provide complete and honest information about the company’s business situation and results; review accounting books, minutes, contracts, transactions, records and other documents of the company;

+ Transfer your capital contribution in the company to another person;

+ Conducting business on behalf of an individual or on behalf of another person in the company’s line of business;

+ Dispose of your capital contribution by inheritance, gift, mortgage, pledge and other forms according to the provisions of law and the company’s Charter; In case of death, the heir will replace the deceased member and become a capital contributing member of the company;

+ Receive a portion of the company’s remaining asset value corresponding to the proportion of capital contribution in the company’s charter capital when the company dissolves or goes bankrupt;

+ Other rights according to the provisions of this Law and the company’s Charter.

– Capital contributing members have the following obligations:

+ Be responsible for the debts and other property obligations of the company within the amount of capital committed to contribute;

+ Not allowed to participate in company management, not allowed to conduct business on behalf of the company;

+ Comply with the Company Charter, resolutions and decisions of the Board of Members;

+ Other obligations according to the provisions of this Law and the Company’s Charter.

Thus, when becoming a capital member in a partnership, you will have the rights and obligations as prescribed above.