General partnership (pilnsabiedrība)
In Latvian: Pilnsabiedrība
A general partnership (pilnsabiedrība) is a Latvian partnership in which two or more persons (members) have joined under a partnership agreement to carry on business under a common firm name without limiting their liability to the partnership's creditors.
The members are personally liable for the partnership's obligations as joint debtors with all their property, and any agreement limiting this does not bind third parties. That is the main risk compared with an SIA, where a member risks only what they invested.
The founding is filed for entry in the Commercial Register, and all members sign the application. A general partnership is not a capital company, so it has no share capital, and the partnership agreement governs relations between the members.
If even one member should have liability limited to their contribution, the form to choose is a limited partnership.
Example
Two architects set up the general partnership "Bērziņš un Liepa". If the partnership cannot pay a EUR 20,000 debt, the creditor can claim the full amount from either member personally.
Legal basis
- Commercial Law, Section 77 likumi.lv
- Commercial Law, Section 78 likumi.lv
- Commercial Law, Section 94 likumi.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.