This structure also maintains a direct normative link with the simple limited partnership, from which it inherits various supplementary legal rules. Bolivian legislation establishes that in the absence of specific provisions, the rules applicable to the simple limited partnership shall govern. This connection ensures legal continuity, impacting essential aspects such as partner participation, administrative restrictions, and internal control mechanisms.
The S.C.A. structure allows for a clear distinction between those actively involved in management and those contributing capital only, with defined implications regarding duties, rights, and liability limits. Its formation and operation must comply with specific legal requirements to ensure transparency, especially concerning corporate name, management, legal representation, and share transfers.
LIABILITY OF PARTNERS IN A LIMITED PARTNERSHIP BY SHARES
The S.C.A. comprises two types of partners:
- General Partners: They participate in the management and legal representation of the company and are jointly and severally liable for the company’s obligations, similar to general partnerships. This equivalence is explicitly established in Bolivian law.
- Limited Partners: They do not take part in the management, and their liability is limited to the value of the shares they subscribe. Only their contributions may be represented by shares, allowing the company to raise capital without affecting operational control.
APPLICABLE LEGAL FRAMEWORK
LEGAL REQUIREMENTS FOR THE CORPORATE NAME
The corporate name must include the term “Sociedad en Comandita por Acciones” or its abbreviation “S.C.A.” If the company uses a trade name that includes surnames, these must belong to one or more general partners. Failing to meet these naming requirements may result in severe consequences, such as reclassification as a general partnership or unlimited liability for the administrators—even toward third parties.
MANAGEMENT AND TERM OF OFFICE
Management may be undertaken by one or more general partners or even by third parties, as determined by the bylaws. Unlike corporations, S.C.A. administrators are not subject to a three-year limit on their term of office. This means administrators may hold office for the period specified in the bylaws, without general legal time restrictions.
REMOVAL OF GENERAL PARTNERS
A general partner may be removed according to the rules applicable to administrators in general. If the partnership agreement does not require cause, removal can be decided by majority vote. However, if just cause is required by contract, a judicial decision will be necessary for definitive removal.
Additionally, any limited partner holding at least 10% of the capital may file for judicial removal of a general partner if justified causes exist—such as fraud, negligence, gross misconduct, or legal incapacity to engage in commercial activity. Upon removal, the general partner may retire or become a limited partner, provided they have not committed criminal acts against the company.
VOTING RIGHTS IN LIMITED PARTNERSHIPS
Both types of partners form part of the shareholders’ meeting. For quorum and voting calculations, the general partner’s participation is divided into units equivalent in value to shares. Units that do not equate to at least one full share are not considered valid. This measure ensures balanced decision-making.
Certain matters are expressly restricted for general partners with respect to voting. For example, in decisions concerning their removal, approval of their management, or the appointment of statutory auditors, general partners may only speak but not vote—under penalty of nullity. This limitation safeguards impartiality in potentially conflicted decisions.
TRANSFER OF INTERESTS BY GENERAL PARTNERS
The transfer of a general partner’s interest requires approval from an extraordinary shareholders’ meeting, preventing the entry of new managing partners without majority consent. This aligns with the personal nature of general partner roles, which involve direct management responsibilities beyond mere capital contribution.
SUPPLEMENTARY RULES FROM SIMPLE LIMITED PARTNERSHIPS
When specific rules for the S.C.A. do not address a particular issue, the provisions of the simple limited partnership apply. These include:
- The prohibition for limited partners to engage in management. If they do, they may be considered general partners and assume unlimited liability.
- The right to inspect books, financial statements, and accounting records.
- The requirement of unanimity to amend the partnership agreement, unless otherwise stated.
- The possibility for limited partners to take urgent actions in the absence of all general partners, to prevent dissolution.
Limited partnerships by shares offer a legal structure that allows capital raising through share issuance without compromising operational control by general partners. Its specialized regulation and interaction with other recognized company types under Bolivian law ensure transparent operations, with clear rules on management, representation, oversight, and partner participation.
Our firm provides specialized legal counsel in the incorporation, modification, and dissolution of companies. If you require legal assistance in corporate matters, do not hesitate to contact us for personalized guidance in accordance with current regulations.
Frequently Asked Questions (FAQs)
What is the liability of a limited partner?
A limited partner’s liability is strictly limited to the capital they have contributed through share subscription.
What happens if a limited partner engages in management?
They may be considered a general partner and become jointly and severally liable to third parties for the actions in which they have participated.
Is it mandatory to include “S.C.A.” in the company name?
Yes. Failure to include it may result in sanctions, including unlimited liability for administrators and reclassification of the entity as a general partnership.
Can a general partner be removed without cause?
Yes, unless the partnership agreement requires just cause, in which case judicial intervention is needed to validate the removal.
What rules apply when a specific situation is not regulated?
The rules of the simple limited partnership apply on a supplementary basis.
The content of this article does not reflect the technical opinion of Rigoberto Paredes & Associates and should not be considered a substitute for legal advice. The information presented herein corresponds to the date of publication and may be outdated at the time of reading. Rigoberto Paredes & Associates assumes no responsibility for keeping the information in this article up to date, as legal regulations may change over time.
