Limited Partnership (Ortakëri e Kufizuar) in Kosovo
A Limited Partnership (Ortakëri e Kufizuar) in Kosovo is a business structure formed by one or more general partners (with unlimited liability) and one or more limited partners (with liability limited to their capital contribution). This type of partnership offers management flexibility for general partners and low-risk opportunities for investors.
1. Key Features
Two Types of Partners:
General Partners: Fully liable for the debts and obligations of the partnership. They are responsible for managing the business.
Limited Partners: Liable only up to the amount of their capital contribution. They typically do not participate in the management of the business.
Legal Status: The partnership does not have a separate legal personality.
Liability: General partners have unlimited liability, while limited partners have limited liability.
2. Advantages
Capital Infusion: Limited partners can provide additional capital to the business.
Management Flexibility: General partners handle management, while limited partners act as passive investors.
Attracting Investors: Offers a low-risk investment model for limited partners.
3. Disadvantages
Unlimited Liability: General partners risk their personal assets to cover business debts.
Management Restrictions: Limited partners cannot participate in management, which may lead to decision-making challenges.
Distributed Authority: Management responsibilities are primarily with general partners, potentially leading to an imbalance in workload.
4. Establishment Process
A. Required Documents:
Partnership Agreement:
Must be in written form and signed by all partners.
Should outline roles, rights, obligations, profit and loss distribution, and conditions for dissolution.
Identification Documents:
Valid identification for all partners.
Proof of Address:
Partnership address, supported by a lease agreement or title deed.
B. Application Process:
Name Registration:
Choose a partnership name that includes "Ortakëri e Kufizuar."
Register the name with the Kosovo Business Registration Agency (ARBK).
Submission:
Submit the required documents to ARBK either in person or via electronic systems.
Registration Fees:
Pay the applicable fees for business registration.
C. Unique Identification Number (BIN):
Upon successful registration, the partnership is assigned a unique Business Identification Number (BIN).
5. Operation and Management
A. Management:
General partners are responsible for daily management and decision-making.
Limited partners are only involved as investors and do not engage in management.
B. Profit and Loss Sharing:
Profits and losses are distributed according to the partnership agreement.
Unless otherwise stated in the agreement, the liability of limited partners is confined to their capital contribution.
C. Debts and Obligations:
General partners may need to use personal assets to settle partnership debts.
Limited partners are only liable up to their capital contribution.
6. Legal Basis
Article 64: Nature of Limited Partnership.
Article 65: Partnership Agreement.
Article 68: Responsibilities of Limited Partners.
Article 71: Profit and Loss Sharing.
These provisions are outlined in the Law on Business Organizations of Kosovo (Law No. 06/L-016).
7. Post-Establishment Obligations
A. Tax Registration:
The partnership must register with the Kosovo Tax Administration.
Taxation is based on the income declarations of general and limited partners.
B. Updates and Changes:
Any changes to the partnership’s address or structure must be reported to ARBK.
C. Dissolution:
If the partnership is dissolved, it must be reported to ARBK in accordance with the partnership agreement.
8. Example Scenario
Two entrepreneurs planning to start a food distribution company could choose a Limited Partnership structure. A general partner would handle operations and management, while a limited partner would act as a financial investor, assuming minimal risk.
Conclusion
A Limited Partnership (Ortakëri e Kufizuar) is a business model where general partners actively manage the business and assume unlimited liability, while limited partners act as passive investors with limited liability. It is a suitable structure for ventures seeking to attract investors and increase financial resources.