Stipulation of a limited-liability amount and the consequences associated therewith

Jurisprudence 5/2020 Section: Articles Page: 35-42

Keywords: limited partnership, limited-liability amount, limited partner, liability

Abstract: The article deals with the stipulation and the consequences of stipulation of a limited-liability amount for some or all limited partners of a limited partnership. The author defines the concept of a limited-liability amount and states that the limited-liability amount shall always be stipulated in the partnership agreement. Stipulation of a limited-liability amount usually interferes with the rights of other limited partners and may also interfere with the rights of general partners, and therefore, the stipulation of a limited-liability amount always requires the consent of those partners whose rights are affected, even if it is possible to change the partnership agreement by a majority decision. Stipulation of a limited-liability amount has implications for the distribution of profit among limited partners, for bearing the loss of a limited partner, and their liability. The regulation in the Business Corporations Act raises a number of interpretation problems that the author solves. The author also discusses the consequences of changes in the amount of the contribution obligation on the limited-liability amount.

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