Società semplice

General Partnership (Non-Commercial)

What it is

A non-commercial general partnership (società semplice, or S.s.) is the most basic form of partnership. The key feature is the fact that it can cover only the exercise of a non-commercial economic activity and, therefore, mainly farming. The articles of association are not subject to special formalities, but must at least be in writing, depending on the assets transferred to the partnership. The partnership must be registered with the Registrar of Companies. There is no minimum amount of capital.

Characteristics

The simple partnership is characterised by unlimited joint and several personal liability of all partners for the entity’s debts. By way of a specific agreement, the personal liability of partners who have not acted in the name of the partnership can be excluded, but such agreement has to be brought to the attention of third parties or this limitation of liability is not effective. If repayment of debt is demanded directly of a partner, the latter may request that the creditor examine in advance the partnership’s assets, indicating those assets which can most easily meet the debt (so-called benefit of prior execution of assets).The general partnership is not subject to bankruptcy.

In general partnerships the law does not provide for a shareholders’ meeting; to amend the partnership agreement, the consent of all partners is required unless otherwise specified in the articles of association.

Administration and representation

The administration and representation of the partnership are generally vested in each partner separately. However, different agreements are allowed and the partners, at the time the partnership is set up, may decide to choose a co-management arrangement for both ordinary and extraordinary activities, or separate authority only for ordinary matters and joint for extraordinary matters. It is also possible to limit management to only some of the partners.

Winding Up

The general partnership is wound up at the expiration of its duration, or by having achieved its purpose or the impossibility of achieving it, or by the desire of all the partners, or when there is no plurality of partners for a period of six months, or for any other reason provided for in the original contract.

In the event of dissolution a liquidator may be appointed who shall collect the remaining receivables, pay the remaining debts and liquidate the partnership, distributing the remaining assets among the partners and, at the end of the liquidation, seek removal from the register of companies.

The liquidation can be avoided if, when the cause of dissolution occurs, there are no debts and the partners decide to share out any remaining assets in proportion to their respective interests. In this case, the partnership may be removed from the Register of Companies as soon as the partners decide to wind up the partnership.