Statement by a partner from a limited partnership

The departure of a partner from a limited partnership is most often due to economic, business or conflict between partners. What should we pay attention to when we find ourselves in a situation where partners break up?

Provisions Act dated 15 September 2000 Commercial Companies Code (Journal of Laws, item 1037 i.e. dated 22 February 2019 Journal of Laws of 2019, item 505, hereinafter ‘ksh’) in the division dedicated to the limited partnership, they do not directly regulate the issue of the shareholder’s withdrawal. Article 103(1) KSH refers, on the other hand, to the provisions on the public company.

In the light of existing legislation, it is possible to distinguish three the methods of withdrawal of the shareholder from the limited partnership, by disposing of all rights and obligations of the partner of the limited partnership or denunciation of the partnership agreement, by amending the partnership agreement

In the light of existing legislation, it is possible to distinguish three the methods of withdrawal of the shareholder from the limited partnership, by disposing of all the rights and obligations of the partner of the limited partnership or denunciation of the partnership agreement, by amending the partnership agreement[1].

Disposal of all rights and obligations

It is possible to withdraw from the limited partnership by disposing of all the rights and obligations of the shareholder if there is two condition: there must be a clear indication in the company contract that the disposal of rights and obligations is acceptable and that all partners must give prior written consent (Article 10(1) and (2) KSH).

Such consent is most often given in writing by adopting a resolution. It follows from the dispositive nature of the consent that partners in the company's contract can both mitigate and tighten the requirement of form (e.g.

consent in the form of a notarial act, or in writing with notarially certified signatures), but there is also an exclusion of the total waiver of consent[2].

At this point, it should be pointed out that the legal provisions also provide for other restrictions on the disposal of all the rights and obligations of a partner in a limited partnership, e.g.

it is not permissible to transfer only part of the rights and obligations, in particular specifying the rights and obligations to be disposed of by means of the percentage share to be disposed of[3].

On the other hand, it is possible to dispose of a specific shareholder's claim to the company resulting from the shareholder's rights (disposal of the claim to pay the profit for a given financial year, claim already due), except that it is not possible to transfer the sole right to participate in the profit.

The sale of all rights and obligations may be effected by any agreement, in particular in the form of a sale or donation agreement.[4].

Nor does the Code of Commercial Companies provide for any specific form of agreement to dispose of all the rights and obligations of a partner in a limited partnership, however it is worth to do so at least in writing for the sake of safety of trading.

Therefore, the conclusion of the above agreement in the form of a notarial act is not compulsory, although the partnership agreement may provide for a specific requirement as to the form of its conclusion. Disposal of all rights and obligations of a partner in a limited partnership does not require a change to the company's contract.

Termination of the partnership agreement

By way of a provision Article 61(1) KSH any partner may terminate the partnership agreement concluded for an indefinite period of time six months before the end of the financial year.

The termination of the partnership agreement should be made by the shareholder in a written declaration, which he should make to the other shareholders or to the shareholder authorised to represent the company (Article 61(3) KSH).

According to the judgment of the Court of Appeal in Poznań of 20 May 2008 (And ACa 316/08, ‘Denunciation of a contract as a unilateral declaration of will of a legislative nature cannot be made subject to a condition within the meaning of Article 89 KC.

This would be contrary to the substance of the legal act aimed at definitively regulating the connecting side of the legal relationship.” Termination of the public partnership agreement on condition that it is inadmissible (excl. SN from 29 April 2009, II CSK 614/08, OSNC 2010, No 2, item 32).

On the other hand, the issue in the doctrine is the possibility to terminate the partnership agreement concluded for a specified period of time.

Due to regulation Article 62(2) KSH, which only exceptionally allows the creditor to terminate a partnership agreement concluded for a specified period of time, and, for the nature of contracts concluded for a specified period of time, it is generally accepted that it is unacceptable to terminate a public partnership agreement (and hence a limited partnership agreement) concluded for a specified period of time if the partnership agreement does not contain a clear provision allowing such a contract to be terminated.

In such a case, the public partnership contract concluded for a limited period shall be terminated at the expiry of the period for which it was concluded.[5].At the same time, the view is predominate that the shareholder may terminate the public partnership agreement concluded for a limited period of time if the partners expressly permit such a possibility in the partnership agreement and at the same time specify the conditions for the termination of the public partnership agreement concluded for a limited period of time[6].

Amendment of the company's contract – controversy

A controversial question is the possibility of a shareholder from a limited partnership to withdraw by changing the content of the partnership agreement, in such a way as to allow the shareholder to leave the company in a different way than the termination of the partnership agreement or the sale of rights and obligations.

According to the judicature, it is unfortunately not possible to change the composition of the company's partnerships in any other way than by denunciation of the company's contract (Article 61(1) (k.s.h.) or transfer of all rights and obligations to a person third or another partner of the company according to Article 10 k.s.h[7].

The District Court in Łódź in the above-mentioned judgment concluded that the way in which the shareholder appeared from the public company (and consequently from the limited partnership) was regulated by KSH rules in a way exhaustive. Therefore, there is no basis for creating other non-coded ways to get a partner out of the open company.

This means that a voluntary partner remains two the possibility to terminate the partnership agreement or to dispose of all rights and obligations under the conditions laid down in the contract.

In addition, it was pointed out in the ruling that the withdrawal of the shareholder under the agreement of all shareholders was not based on any of the provisions of the KSH, and that the consent of the shareholders could not constitute the basis for the change in the composition of the company in the light of the Article 3531k.c.

establishing the principle of contractual freedom.

Despite the above-mentioned view of the District Court in Łódź in practice, in particular the registered courts competent for individual companies allow the withdrawal from the partnership of the shareholder, the following as a consequence of the amendment of the company's contract and the submission of a declaration by the participating shareholder.

The argument in favour of the above mentioned exit is that the provisions of KSH do not prohibit the withdrawal of a shareholder from the company by agreement of the parties and with immediate effect.

Provision Article 3531 The KC cannot be regarded as a competitive norm in this respect, and at most of a complementary nature to the regulations of k.s.h., in particular to Article 9 k.s.h.

from which it follows that the amendment of the terms of the partnership agreement, in the absence of any different provisions in the contract, requires the consent of all shareholders[8].

It should therefore be stressed that the amendment of the articles of association should be permitted unless it is contrary to the law, the principles of social coexistence and the nature of relations (Article 3531kc).

In view of the above, it is difficult to approve the above-mentioned view of the court that Article 61 KSH and Article 65 KSH (because of its absolutely binding nature) excludes the possibility of amending the contract in respect of the composition of the company under the partnership agreement.

If, therefore, the KSH does not regulate and introduces an exemption in relation to the ‘agreement of the parties’, it follows Article 9 k.s.h. it should be considered that in this respect they should find provisions of the Civil Code (Article 2 k.s.h.).

This view is indirectly endorsed in practice by the registered courts (in the Warsaw district) by making changes in the company's personal compositions, made in fact in the manner described above.

Writing:

• [1] https://www.komandytowa.pl/jestem-wspolnikiem-w-spolce-komandytowej-w-jaki-sposob-moge-wystapic-z-tej-spolki.html
• [2] (Yes: M. Tarska, Scope of contract freedom in commercial companies, Warsaw 2012, p. 248; K. Kopaczyńska-Pieczniak, Legal position of the shareholder of the public company, Warsaw 2013, p. 389).