Ordinary limited partnership (SCS/GCV)

Description of the SCS/GCV

An ordinary limited partnership (société en commandite simple/gewone commanditaire vennootschap) is a company comprising one or more jointly and severally liable partners, known as the managing partners (commandités/beherende vennoten), and one or more financial backers who act as limited partners (commanditaires/stille vennoten). This type of company is suitable for people who, for example, wish to open a shop (as active partners or managers) but do not have sufficient capital.

Features

  • There is no minimum amount, but the partners must contribute to the SCS/GCV the full amount that they pledged to invest in the articles of association. The name of the company must include the name of one or more of the managing partners.
  • It is no longer prohibited to use the name of a limited partner in the company name, but doing so gives rise to greater liability. The limited partner is only liable up to the amount that he has pledged to contribute. He cannot perform any administrative act, even by proxy. The managing partners have unlimited joint and several liability. The limited partners have limited liability.

Articles of incorporation

When setting up an SCS/GCV, the articles of incorporation may take the form of a notarial deed, although this is not compulsory.

Legal and administrative obligations

A copy of the articles of incorporation must be filed at the registry within 15 days of the final articles of incorporation being drawn up. The registrar arranges publication in the Belgian Official GazetteExternal link.

All companies must enrol on the register of legal entities kept at the commercial court registry. The registry will assign the company an enterprise number.

Once they have enrolled on the register of legal entities, companies wishing to engage in commercial activities must register as traders at the Crossroads Bank for Enterprises (Banque-Carrefour des Entreprises/Kruispuntbank van Ondernemingen) via a business counter (one-stop shop for businesses)External link (French-Dutch).

Advantages

The SCS/GCV has a number of advantages:

  • There is no required minimum capital.
  • The incorporation of an SCS/GCB does not require a notarial deed: a private deed(acte sous seingprivé/onderhandse akte) is sufficient. 
  • Shares cannot be transferred without the agreement of the other partners, which helps to safeguard the private nature of the company. 
  • The disclosure requirementis limited. 
  • Work done by the partners can count as ‘contribution’. 
  • The liability of the limited partners is limited to the amount of the contribution they have paid or pledged. 
  • This contribution entitles them to a share in the profits but their share of any loss is limited to the amount of their contribution.

Disadvantages

The SCS/GCV also has some disadvantages:

  • The partners are jointly and severally liable.
  • Business documents must state that the company is an SCS/GCV.
  • If the company goes bankrupt, the partners are also declared bankrupt.
  • If one of the limited partners behaves like a managing partner and/or performs administrative acts, he will be deemed to be a managing partner and considered jointly and severally liable with no limitation.