The existence of partners in a partnership has to be carefully examined based on the extent of liability each partner is willing to incur. The nature of liability determines the scope of management of the partnership and the implications when it comes to the dissolution of the partnership.
A sleeping partnership is a partnership in which one or more partners are indefinitely, jointly and severally liable for the company’s debts, referred to as ‘active partners’ coexist with one or more partners liable for the company’s debts up to the limit of their shares, referred to as ‘sleeping partners’ and whose capital is broken down into partnership shares.
A sleeping partnership shall be referred to by a name which shall be immediately preceded or followed by the words ‘sleeping partnership’ or by the abbreviation ‘S.P’. The name of a sleeping partner shall under no circumstances be included in the partnership name, otherwise the latter shall be liable for the debts of the partnership without limit.
The partnership deed shall include the following information;
- The amount or value of all the partner’s contributions,
- The fraction of this amount or value belonging to each active or sleeping partner,
- The overall share of the active partners and the share of each sleeping partner in the profit-sharing or in the bonus after liquidation.
Partnership shares may be transferred only with the consent of all the partners. However, the deed of partnership may stipulate;
- That the shares held by the sleeping partners shall be freely transferable between partners,
- That the shares held by the sleeping partners may be transferred to third parties outside the sleeping partnership with the consent of all the active partners and by a majority in number and capital of the sleeping partners etc.
The transfer of shares may be demurrable to third parties only after the fulfilment of certain formalities and after publication by an entry in the Trade and Personal Property Credit Register.
A sleeping partnership shall be managed by all the active partners unless otherwise provided by the deed of partnership which may appoint one or more managers from among the active partners, or provide for the appointment of such manager(s) by a subsequent instrument, under the same conditions and with the same powers as in a partnership.
A sleeping partner may not perform any act of external management, even by virtue of power of attorney.