A small partnership is a private legal entity with a limited civil liability.
Small partnerships can be established only by natural persons, even by one person, but the number of incorporators shall not exceed ten persons. By its legal status a small partnership makes a bridge between an individual enterprise and a private limited liability company. Small partnerships are especially suitable for small and medium-sized business, family business and new business persons.
Features of a small partnership
- It is less expensive and takes less time to establish a small partnership than a private limited liability company
- It is not necessary to ensure even a minimum authorized capital for a small partnership being established
- A cumulative bank account is also not necessary
- A partnership is incorporated only by natural persons
- Simplified management (election of a director is not mandatory)
- No employment contracts are concluded with the members, working for small partnerships
- When contributing property to a small partnership, the value of non-monetary contributions is established by unanimous agreement between the members. The activities of a small partnership are based on personal traits based co-operation
- There are two options for a small partnership management structure: 1) The meeting of members of the small partnership, which is considered a management body; 2) The meeting of members of the small partnership and the manager of the small partnership
- Simplified requirements as regards the accounting (financial statements are not mandatory)
- Profit distribution may be performed for a time period shorter than one financial year