Simple Limited Partnership (Societate în Comandită Simplă - SCS)

Redactor: Duma Cristian-Gabriel

Chapter 1: Formation and Capital Structure

• Formation: Creating an SCS is done through the constituive act is a foundational legal document that establishes the company's identity, structure, and purpose, including details such as company name, registered office, business objectives, and capital structure. The constitutive act must contain:
  • The company's form, name, and registered office.
  • The business objectives of the company.
    The social capital.
  • Identification details of the associates (Identity Card or Passport).
    The associates representing and managing the company or the non-associate administrators, their identification details, and the respective duties each will exercise together or separately.
• The share of each associate in profits and losses.
• The locations.
• The duration of the company.
• The method of dissolution and liquidation of the company.
• Capital Requirements: There are no legal minimum capital requirements for establishing an SCS..

Chapter 2: Structure

• The SCS is composed of:
  • General partners (associates in a limited partnership):
    • may commit to labor contributions as part of their social investment, but these cannot be considered contributions to forming or increasing the company's share capital.
    • unlimited and joint liability for the company's obligations.
    • They can also act as managers and are responsible for the company's administration and management.
    • They are entitled to have their names included in the company's registered name.
  • Limited partners (limited partners with a comma missing after "Limited"): are liable only up to the amount of their invested capital in the company. These partners can be either individuals or legal entities.
    • They do not have the right to have their names included in the company's business name.
    • They do not have the right to perform administrative acts within the company.
  • Decision making: in a simple limited partnership, there isn't a formalized general assembly of associates. Instead, both general and limited partners deliberate and make decisions on the company's key issues.

Chapter 3: Mandatory Registers

• Unique Control Register – acquired from the Financial Administration the Company is affiliated with.
• Fiscal Record Register (if the company is a profit tax payer) – acquired from the Financial Administration to which the Company belongs.
• Employees' Record Register – If the company has employees, an electronic register must be kept. Usernames and passwords are obtained from the Territorial Labour Inspectorate (ITM) in the county where the company's registered office is located.

Chapter 4: Dissolution & Liquidation

• Dissolution: the general causes of dissolution are specified in law 31/1990, as articles 222 and 232, along with the special causes listed in Article 224 of the same law.
  • Special causes of dissolution include: bankruptcy, incapacity, exclusion, withdrawal, or death of the sole general partner or the sole limited partner.
  • Note: the company does not dissolve if the articles of association include a clause for continuation with the heirs, or if the remaining associate decides to continue the company's existence as a sole proprietorship with limited liability.
• Liquidation: The general rules applicable to all types of companies are fully applicable in the case of SCS.

Conclusion: Simple Limited Company

• The Simple Limited Company offers a unique blend of flexibility and structure, ideal for diverse investment and management approaches. Its formation is streamlined, with no minimum capital requirements, while the constitutive act clearly defines the company's objectives and structure. The roles of general and limited partners balance liability protection with operational involvement, suiting various management styles. The SCS's informal decision-making processes in smaller setups encourage direct governance. Mandatory registrations ensure legal compliance and transparency. Finally, structured dissolution and liquidation procedures provide a clear end-of-life plan for the company, making the SCS an attractive choice for entrepreneurs and investors seeking a balanced, legally sound business entity.