Restructuring capacity of the limited partner part II
Following on from the considerations set out in the entry Restructuring capacity of the limited partner part I – on the restructuring capacity of limited partners in limited partnerships, the cases in which the limited partner will be entitled to restructuring capacity require further clarification.
Subjects with returning capacity
In the situation referred to in the second sentence of Art. 104 § 4 of the Polish Commercial Companies Code, the limited partner is liable towards third parties in the same way as the general partner. On the other hand, according to Art. 102 of the Polish Commercial Companies Code, at least one partner in a limited partnership is liable towards creditors for the company’s obligations without limitation. The rules of the general partner’s liability result from art. 22 § 2, 31 § 1 and 34 in connection with art. 103 of the Polish Commercial Companies Code. Therefore, the company is primarily responsible for the liabilities with its own assets (the so-called primary liability), and in addition, the general partners are responsible for the personal assets without limitations.
Restructuring capacity of the limited partner
Article 4(1)(2) of the Restructuring Law (p.r.o.) grants restructuring capacity to shareholders of commercial companies, who bear responsibility for the company’s obligations without limitation of their entire assets. There is no doubt that such capacity is available, inter alia, to general partners in limited partnerships and limited joint-stock partnerships. Since granting the partners of partnerships the restructuring capacity is the result of their unlimited liability for the company’s obligations (as the legislator does not limit this capacity to certain types of partners, e.g. partners of general partnerships, general partners of limited partnerships), the scope of liability of the limited partner is extended to that of the general partner in the case referred to in the second sentence of Art. 104 § 4 of the Polish Commercial Companies Code. justifies the assertion that he is entitled to the restructuring capacity.
In such a situation, the limited partner is included in the set of entities defined in Article 4(1)(2) of the Restructuring Law (p.r.o.). – is a partner in a commercial partnership (limited partnership) bearing responsibility for its obligations without limitation of its entire assets.
Liability of a limited partner under the code of commercial companies
In the case of the regulation of art. 118 § 2 of the Polish Commercial Companies Codie. the situation is more complex – if a limited partner performs a legal transaction on behalf of the company without disclosing his or her power of attorney, he or she is liable for the effects of the transaction in relation to third parties without limitation, this also applies to the representation of the company by a limited partner who has no power of attorney or who exceeds its scope. We can therefore distinguish two cases:
- A limited partner acts on behalf of the company without disclosing his or her power of attorney, so the act performed by him or her is valid, but in the case of not disclosing the power of attorney (he or she behaves in external relations like a general partner) – so he or she is responsible for this obligation without limitation,
- A limited partner acts on behalf of the company without or outside the scope of the power of attorney. Bearing in mind Articles 103 and 104 of the Civil Code, the company may confirm the action (in such a case the obligation is also binding on the company, with the limited partner still responding without limitation, as in point 1). On the other hand, if the company does not confirm the limited partner’s activity, the limited partner is liable without limitation (but this time pursuant to Article 103 or 104 of the Civil Code).
In the latter case, there can be no question of the limited partner’s restructuring capacity (the obligation is binding only on the limited partner, not the company).
In other cases, the limited partner is still liable without limitation for the company’s obligations (although not necessarily for all of them). The Restructuring Law in Article 4(1)(2) does not specify that liability is to apply to all liabilities.
The Act also does not regulate the issue of grounds for opening proceedings for a shareholder of a partnership. Therefore, the premises should be examined on general principles (the basis for opening restructuring proceedings is the threat of insolvency or insolvency) and do not have to be related to the partner’s liability for the company’s liabilities.
The threat of insolvency does not have to result only from obligations for which the company is also responsible. All obligations of the limited partner will be restructured (as in the case of the restructuring of the general partner). The Act does not provide for limiting the partners’ restructuring capacity only to the company’s liabilities for which they are liable without limitation.
It should be stated that the mere fact of being liable for the company’s liabilities without limitation confers on the limited partner the restructuring capacity in respect of all of its liabilities. Therefore, the limited partner has the restructuring capacity already in the case of the existence of one obligation for which the limited partner is liable pursuant to Article 118 § 3 of the Polish Commercial Companies Code.