Limited Partnership by Shares (Société en Commandite par Actions)
The limited partnership by shares, just like the Simple limited partnership, is constituted amongst at least two partners divided into two categories of partners: the general partners and the limited partners. General partners (referred to in French as “commandités”) are in charge of the partnership‘s management and they are jointly and severally liable for all debts and obligations of the partnerships. As such, general partners are considered to be “merchants” and are thus subject to the provisions applicable to merchants including the provisions of the Lebanese Code of Commerce. As for limited partners, their liability is limited to the amount of their contribution into the partnership.
The limited partnership by shares works under the “partnership denomination” (such name is referred to in French as “raison sociale”) which must include the name of some or all general partners followed by the expression “et Cie” or “and Co”. It should be noted that limited partners may not interfere in the partnership management and their names may not be included in the partnership’s denomination. However, unlike simple limited partnerships, shares of limited partners are not referred to as “parts”, they constitute a “joint-stock” and are similar to the shares of joint stock companies. They are hence freely tradable and their transfer does not in principle require the partners’ unanimous approval.
The minimum initial capital is /30 000 000/ LBP (approximately /20 000/ USD). The capital can be in cash and/or in-kind contributions. An auditor and a lawyer must be appointed with yearly retainer fees.
Step-by-Step Process for Business Registration
This section describes the simplified process of registering a Limited Partnership by Shares (Société en Commandite par Actions). In general, the simplified process involves three stages:
Stage 1: Getting forms from Libanpost and checking the desired name availability.
Stage 2: Preparing all required forms and documents.
Stage 3: Submitting the filled forms and documents and the required fees to Libanpost.
Once these stages are completed, the applicant(s) will receive from Libanpost by mail the Certificate of Incorporation (Registration) and Tax ID within five to seven business days. The applicant is then ready to do business and the bank will liberate the fund (capital) blocked by the founders (where applicable) upon request.
Following is a description of the registration process :
Stage 1: Getting the required forms from Libanpost and checking the name availability.
Once the applicant has elected to register a Partnership by shares, the applicant will visit any Libanpost office in order to:
- Verify the Partnership’s name availability through the database available at Libanpost.
- Obtain the required forms, namely:
i. The Partnership’s by-laws/articles of association
(Form PBS 1-1)
ii. The request for a bank certificate confirming the opening of a bank account and subscription to the Partnership’s capital
(Form PLP 1-1)
iii. The request for registration of the Partnership
(Form PLP 2-1)
iv. The Partnership’s Commercial Circular
(Form PLP 3-1)
v. The Partnership’s constitutive general assembly
(Form PBS 2-1)
vi. The Partnership by Shares Certificate of Incorporation
(Form PLP 4-1)
- Obtain a list of the fees and expenses that need to be paid (Appendix II).
Stage 2: Preparing and Completing all required forms and documents.
Once the above forms are obtained, they must be completed as follows:
1- The Partners (at least two) must sign the Partnership’s by-laws before a notary public. A sample text of by-laws is annexed as Form PBS 1-1 that the partners may fill and sign “as is” or they may wish to add to it other clauses.
2- The Partners will then open a bank account in the name of the “Partnership under constitution”. The Partners will deposit in such account all amounts paid for the capital subscription. The Partners will submit to the bank a request in the form of Form PLP 1-1, requesting the bank to issue a certificate evidencing the opening of the bank account and subscription of each partner to the corresponding number of shares. The bank will usually require a copy of the notarized by-laws for the opening of such account and the issuance of the required bank certificate.
3- The partners will then hold a constitutive meeting during which they will fill and sign the minutes attached as (Form PBS 2-1). The minutes include the appointment of a lawyer and hence must be signed for approval by the said lawyer.
4- The Commercial Circular Form PLP 3-1 will then be completed and signed by the Partnership authorized signatories (usually the general partners), in as many copies as the applicants require.
5- The Certificate of Incorporation will be completed (Form PLP 4-1).
6- The applicant will then fill in the request for registration (Form PLP 2-1).
Stage 3: Submitting the filled forms and documents and the required fees to Libanpost.
Once all the above forms are completed, the applicant will submit the entire file to Libanpost and pay all required fees and expenses. Copies of legal identification (ID) of all partners and/or shareholders should also be submitted.
Completion Stage:
Within approximately 5 business days of submission of the entire file to Libanpost the applicant will receive:
- A “Certificate of Incorporation” evidencing the Partnership registration,
- A Tax Identification Number (TIN)
- Any other required documents
The applicant is now ready to do business. The bank will liberate the funds (capital) blocked by the founders upon presentation to the bank of the liberation of funds’ request (Form PLP 5-1) with the relevant documents.