The second form of a legal partnership that is regulated in the Bulgarian Commercial Act is the Limited partnership company. It differs from the General partnership in one way – the respect of the partners’ participation.
The Limited partnership has two types of partners that differs one from another. The first type is the partners that can bear unlimited liability or the so called ‘general partners’. The second type is the partners with limited liability or the so called ‘limited partners’.
Article 99 in the Commercial Act says that one Limited partnership can be consisted of at least one general partner and one limited partner, so this is very important.
The Limited partnership can be done on the basis of general partnership contract. Keep in mind that the trading name of the partnership has to contain at least the name of one of the limited partners. Article 101 (2) in the Commercial Act says that at least one limited partner has to bear unlimited liability if his or her name is included in the trading name of the Limited partnership. Another necessary thing to found a Limited partnership is a registration in the Commercial register.
The relationship on internal level between the limited partners is pretty similar to the relationship that the partners in a General partnership has, except the obligations and the rights of the general partners. As you might know, the general partners have the obligation to deposit a contribution to the partnership. Their contribution determinate the share of every general partner and their future profits and liquidation quotas. The limited partners are subject of loyalty obligations – in other words, without the consent of the other partners, one limited partner can’t do a rival commercial activity.
Regarding the external thing and relationships of the Limited partnership, the limited partners don’t have any important role. They don’t participate in the management of the company unless they are nominated to do so.
Article 112 in the Commercial Act says that the limited partners have unlimited liability for the legal transactions that have been made in the name of the partnership after or before it has been founded whenever the creditor didn’t know that he or she was contracting with limited partner. Otherwise, the limited partners have liability towards the creditors of the Limited partnership to the contributions, even in the cases when they are not completely paid. This applies also to the cases regarding losses to the partnership. The general partners bear unlimited, personal, joint and several liabilities.