A general partnership is a business entity where two or more individuals join in order to conduct business as a going concern and under a common company name. Every partner has unlimited and joint liability to cover the partnership’s debts with all his/ her assets. A partner may not dispose of his/her ownership stake without consent from other partners.
Any legal entity or individual, both domestic and foreign, may become a partner. The articles of association define the relations between partners. The partners enjoy maximum freedom in this respect, because the Companies Act applies only in cases when the articles of association do not regulate certain matters otherwise.
A general partnership does not have authorized capital. Unless otherwise provided by the articles of association, partners should bring equal stakes into the company. The stakes may consist of cash, tangibles, rights, labor and other services and goods.
Partnership management is the responsibility of all partners. The articles of association may stipulate that only one or just a number of partners run the company. Each partner is authorized to represent the company.
A general partnership is established by adopting the articles of association, which need not be a notarized document. A notarized application for entry into a court register is then submitted.
The application for entry into the court register contains the following information:
- company name, registered office and business activity
- partners (name and surname, residence i.e. company name and registered office for each partner)
- persons authorized for company representation and their powers
- legal and organizational form
- date of adoption of articles of association
- if the partnership is not a going concern, period of operation
- reasons for company dissolution.
Enclosures to the application:
- articles of association
- list of partners
- notarized statement that neither the partners nor the companies in which they have interests or shares have overdue liabilities
- certificate issued by a legal entity authorized to conduct payment transactions showing that neither the partners nor the companies in which they hold interests or shares have a recorded unpaid payment order in their accounts
- certificates from the Tax Administration, Croatian Pension Insurance Institute and Croatian Institute for Health Insurance evidencing that neither the partners nor the companies where they hold stakes or shares have overdue liabilities to these institutions.
- notarized statement containing information about all accounts held by the founders and the legal entities that manage these accounts; a list of all companies where the partners individually or jointly hold more than 50% of stakes or shares and information about all accounts of these companies, the legal entities managing these accounts as well as certificates for these companies issued by the Tax Administration, Croatian Pension Insurance Institute and Croatian Institute for Health Insurance.
Original documents or certified copies should be submitted. As a rule, they should not be older than one month.