Limited partnerships with share capital is a modified form of a company with share capital in which permanent directors manage the company who have unlimited liability, also contingent liability, for social security liabilities. The provisions that are specific for this type of company are reduced to a few which concern above all the management of the company by the unlimited partners.
The peculiar characteristic of this type of company consists in the co-existence of two different groups of shareholders: limited partners, who are not involved in the management of the company and are liable only to an extent that is proportionate to the assets they have contributed to the company; and unlimited partners, who are regular directors and thus personally and unlimitedly liable.
According to the legislator’s initial intention, this type of company was intended for proprietorships undergoing restructuring and expansion, to enable the founder to resort to venture capital, while at the same time continuing to manage the enterprise.
However, in economic practice, limited partnerships with share capital, has never been very widely used, except perhaps between the 1980s and 1990s when an important industrial group was established in the form of an S.a.p.a., to which the shares of the holding were transferred with the precise purpose of binding the partners in the leading group to the pursuance of common strategies. And also in a few other cases limited partnerships with share capital have been used as a “family safe”. In a nutshell the S.a.p.a. guarantees that the enterprise is preserved: the unlimited partners are by law directors and the rules on the appointment of new directors during the lifetime of the company give the directors in office the right of veto on the choice of new directors, thus ensuring that the leading group is safe from attempts of hostile takeovers by raking up shares in the marketplace.
In any case, it should be emphasized that recourse to this type of company has been limited to specific sectors, and has been used in a manner that the legislator had not foreseen, since cases where there is a need to expand the company without losing its leadership has in fact been ensured by the creation of joint-stock companies having a pre-constituted majority, that is to say, made foolproof against voting and blocking syndicates.
In fact the entrepreneurs prefer maintaining the benefit of limited liability, even if this implies only an indirect influence on management strategies.
The 2003 reform does not appear to have had any impact on this type of company, since the letter of the previous law has undergone only very minor changes. We must also recall that the rules governing the s.a.p.a. are the same as those that apply to the s.p.a. because these two types of company are similar. Hence in line of principle the innovations introduced to the rules governing joint-stock companies, mentioned above apply also to the s.a.p.a. insofar as they are compatible. And also there are no doubts that the two-tier management and control system can apply also to limited partnerships with share capital, since the minimum number of unlimited partners/management directors is two. If the s.a.p.a. adopts the two-tier system, the advice of a notary public would be of critical importance , in order not to run the risk of going against the law, especially with regard to the issue of the extraordinary meeting having the power to appoint new unlimited partners/management directors (which is an exception to the general rule).
The monistic management model, instead, cannot be used for problems linked to the independence of one third of the directors, thereby meaning they must not have shares in the company.
Besides the two-tier management system, among the various innovations that apply to the extent to which there is compatibility with the s.a.p.a., mention can also be made of the provisions on shareholders’ agreements, on shares (of special interest is the issue as to whether the shares of the unlimited partner are or are not a special category of shares) and on financial instruments, on auditing and on assets and financial resources to be devoted to a specific transaction.
The provisions governing limited partnerships with share capital, as said earlier, are similar in many respects to those that govern joint-stock companies; and except for the differences indicated above, the reader can refer to the various fact sheets for the aspects indicated below.