Differences in legal capacity

The differences in legal capacity between the various private partnerships

The legal capacity or authority of representation is very different between the partnership and the general partnership. The authority within the largest two, the partnership and the general partnership, is in fact quite the opposite.

Binding the private partnership

In principle a partner in a partnership cannot bind that entity to any obligations, where the partner in a general partnership can do this without any limits. There exist nuances to this starting point, but the differences are substantial nevertheless. Two examples will show the nuances however. In a partnership a partner can bind its entity within

his own particular field, meaning within the field of ‘his part’ of the corporation. Another example concerns the general partnership, which is not bound by a decision of one of the partners when this is clearly outside of the scope of the purpose of the general partnership.

Increasing or decreasing the legal capacity

It could be wiser for both a partnership and a general partnership to increase or decrease the legal capacity of one of its partners in order to improve its activities. The law provides for such a change, which allows a specific regime for every private partnership to deal with the legal capacity of that particular private partnership. Such an agreement can be registered in the register of the Chamber of Commerce, so that all third parties can take notice of the changes in legal capacity of a private partnership.