Understanding Different Types of Business Partnerships

Posted on Apr 5, 2025 in Commercial and Financial Management

Soc Collective

A Soc Collective is a type of partnership where the partners have unlimited liability and are severally liable for the obligations of the society. The main features are:

  1. The directors of the company are all the partners, one or more of them, or a delegated third party.
  2. The name is formed by the name of all partners or any of them followed by the word “and Company.”
  3. The responsibility that affects the partners is unlimited. The partners are accountable for the obligations of the society with all their assets.
  4. The membership fees cannot be transferred without the consent of all partners.

Soc. Limited

The administration of this type of company is delivered to all members or people they choose. The responsibility for the obligations is limited to the amount of their contributions.

The main features are:

  1. Existence of a given capital.
  2. Reduced number of members.
  3. The social capital is in non-marketable shares whose transfer is restricted.

Soc. Encomandita

Its main feature is the two types of partners:

  • Partners Managers: responsible for administration.
  • Limited partners or capitalists: no interference with the administration.

Managing Partners:

They respond with their own assets to the social obligations in perpetuity, but in proportion to the respective contributions. The partners are jointly and severally liable for all obligations under the corporate law (Section 2062 subsection 2).

Limited Partners:

They respond to the concurrence of their contributions (Art. 2097).

The Name:

It is only the name of the managing partners (Art. 2062). If this article is violated, the limited partners shall bear the same responsibility as members of a partnership (Section 2062 subsection 2).

Kinds of Limited Partnerships

Limited Partnership:

Formed by a fund managed entirely by one or more limited partners, or for these and the managing partners at a time. This company is formed as a partnership, or by public deed and the registration of an extract in the commercial register. The responsibility is governed according to the type of partner.

Limited Partnership by Shares:

Capital is divided into shares or coupons per share, or provided by partners whose name appears on the charter. It resembles corporations, but the rules governing the limited partnership apply. The shares are traded on public companies. The partners are responsible for the total amount of shares.


Companies Administration Disclaimer Company Name Transfer of rights
Society
Collective
All
Partners, one or
miscellaneous
a third
strange
 Unlimited
Solidarity to personal property		 Name one of the partners “and Co.”
Rights does not give
Company Directory Limited to the amount of contribution Company Name +
Soc.Anónima or SA
Titles
Negotiable
Society
Limited Liability
 As a collective or anonymous Limited to the amount of contribution Name one or more partners or object + “Co. Ltd.”
Rights does not give
Limited Partnership Only by
managing partners
Managers jointly and severally
Contribution limited to limited partnerships
 Managers name only
Managers not
may assign,
Yes LP

Separate Property

These are small businesses that require little capital.

The owner is who runs the company.

The most obvious advantages of this form of ownership are threefold:

  1. The great ease of setting up these businesses, as capital is invested in any type of property available in the market.
  2. As the owner is who runs the company, they are fast enough in making decisions that require a market economy.
  3. The independence usually motivates the owner of a company of its kind to deploy maximum effort to achieve goals.