A new draft bill for companies under the legal form of partnership has recently been placed under consultation. The main objectives of the bill is both to modernize the provisions of law for partnerships (general partnerships, limited partnerships, silent partnerships) since the current legislative framework remains unchanged since 1835 and to create an effective legislative framework for such small and medium sized companies, which form the basis of the Greek economy. The draft bill’s key provisions are as follows:
* The trade name of general partnerships and limited partnerships can be now formed by the object of the enterprise or from other elements too, additionaly to the already existing option to form the trade name by the names of the partners.
* General partnerships and limited partnerships acquire their legal personality since their registration with the General Commercial Registry (under Greek initials “GEMI”). While for companies not registered with GEMI, however having already started commercial activity (commercial purpose associations) it is provided that, although not having legal personality, they do have legal capacity and bankruptcy capability.
* The partial transfer of the participation of the partners in the company is now regulated. Furthermore, it is provided that the partner’s participation may be freely transferred if such condition is provided in the partnership agreement without the consent of the rest of the partners contrary to what was previously provided by law.
* Any restrictions to the representation powers of the partners may not be enforced towards third parties.
* A partner’s application for the company’s dissolution can be filed only for serious reason.
* Partner’s death, bankruptcy and legal guardianship do not any longer consist a reason for the automatic dissolution of the partnership unless of a contrary provision in the partnership agreement.
* A partner’s creditor may cause the partner’s exit form the company in case of failure of the execution procedure against the partner’s personal property. The partner’s creditor will be able to make a seizure over the outgoing partner’s claim against the company.
* A new entrant general partner is jointly and severally liable for already existing corporate debts, while a contrary agreement may not apply to third parties. For new entrant limited partners it is provided that they shall be liable for already existing corporate debts up to the amount of their corporate contribution or up to such higher amount that shall be agreed between the partners to be the limited partners’ liability upper limit.
* In limited partnerships may be agreed that the limited partner is liable for corporate losses amounting higher than its contribution.
* By virtue of the partnership agreement the legal representation of a limited partnership may be appointed to the limited partner. Such possibility was not provided in the previous legislative framework.
* The conversion of a limited liability company to a general or limited partnership is now regulated.
In the consultation comments reservations are expressed about the efficiency of the bill towards the already tested and successful general provisions for partnerships as well as many objections were expressed regarding the necessity of the provisions for the silent partnerships. Furthermore, the limited time frame of the consultation has not given the opportunity to the respective dialogue to develop accordingly, so that the comments were significantly limited. Finally, for a number of issues that could be regulated by the present bill there are no provisions at all eg. for consortiums, for the effects of mergers of partnerships as it regards the dissolution of such companies etc.
Edited by: Natassa Kollia