Restructuring capacity of the limited partner part I

Restructuring capacity of the limited partner part I

The purpose of restructuring proceedings, in accordance with Article 3 of the Restructuring Law (p.r.o.), is to avoid bankruptcy of the debtor by enabling him to restructure. However, the possibility of benefiting from one of the four restructuring proceedings has been limited by the legislator to a specific circle of entities.

Restructuring capacity

These entities are listed in Article 4(1) of the p.r.o., which defines the scope of so-called restructuring capacity. This term means the ability to act as a debtor in restructuring proceedings. It is held by entrepreneurs within the meaning of Article 431 of the Civil Code, capital companies not conducting business activity, partners in commercial companies, who bear responsibility for the company’s obligations without limitation by their entire property, as well as partners in a partner company. On the other hand, Article 4(2) of p.r.o. indicates entities deprived of restructuring capacity.

Partners in commercial partnerships

As far as partners in commercial partnerships are concerned, who are responsible for the company’s obligations without limitation of their entire assets (Article 4(1)(3) of p.r.o), there is no doubt that this group includes partners in a general partnership, general partners in a limited partnership and a limited joint-stock partnership, as well as partners in partner companies.

The situation is different in the case of limited partners of a limited partnership. As a rule, in accordance with Article 111 of the Commercial Companies Code (CCC), they are liable only up to a strictly defined amount of the limited partnership sum.

Liability of limited partners – exceptions

However, there are exceptions to this rule. The first one is specified in art. 104 § 4 of the Polish Commercial Companies Code, according to which a limited partner is liable as a general partner in a situation when his name or company is in a limited partnership. The second exception is indicated by Art. 118 § 2 of the Polish Commercial Companies Code. – the limited partner is liable without limitation if he acts on behalf of the limited partnership without disclosing his power of attorney or without any power of attorney at all, or exceeding the scope of the power of attorney.

In the above cases, the liability of limited partners with its scope corresponds to the prerequisites for restructuring capacity referred to in Article 4(1)(3) of p.r.o. Therefore, it seems that in this respect the limited partners will have the restructuring capacity.

 

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