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When the limited partner is unlimitedly liable?

Unlike the general partner who has unlimited liability to corporate creditors, the limited partner has limited liability. However, there are also cases where the liability of the limited partner is extended or even becomes unlimited.

In the name of the limited partnership, it is forbidden to include the name of any of its limited partners to protect the transactions, and particularly the interest of bona fide third parties.

If the name of a limited partner is included in the name of a limited company, then a third party may do business with it it only because he has confidence in the person of the specific partner, ignoring of course that he is a limited partner.

Of course, from the second paragraph of article 272, it follows that if the name of a limited partnership includes the name of a limited partner, then it will not be illegal, but will be properly registered in the G.E.MI.

This is inferred from the fact that this article foresees as a possible possibility the inclusion of the name of the limited partner in the corporate name. At the same time, it states that this fact results in the unlimited liability of the specific partner, unless the third party who transacted with the company knew that he was a limited partner.

Therefore, he is also unlimitedly liable for the company's debts as a general partner, without, of course, fully changing into a general partner.

His responsibility, however, does not extend to the internal relations of the company, since as mentioned above the purpose of the law is the protection of third parties. So, he will have limited liability to his partners.

Therefore, , the company operates normally, i.e. all the actions performed by its manager using this name and the obligations he undertakes bind the company.

It is important to clarify that the limited partner is only responsible for the fact that his name is written in the corporate name name and therefore the bona fide third party is not required to prove whether he is actually a full or limited member.

An exception to unlimited liability is introduced when, as in the case of the brand, a third party dealing with the company is aware of the limited liability of a limited partner, since then the third party does not need protection worthy of the law.

However, this does not imply legalization of the operation of an unregistered limited liability company but is done in order to prevent abusive behavior by third parties.

You can send us a message on the Contact Form or you can call at our offices in Athens 2106810690 or in Thessaloniki 2310477725 to analyze the above.

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