A general partnership (vennootschap onder firma, vof) is a form of cooperation between two or more persons who intend to run a business under a joint name. Investments, insurances and the payment of VAT are jointly settled.
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Who are involved?
The ultimate power to take decisions rests with the partners of the general partnership. A general partnership can take persons into employment and/or have contractors, volunteers and trainees who work for the general partnership.
Who has the capital at his/her disposal and is liable?
Agreements on competences, contribution of capital and the division of profits can be made in a solicitor’s office. Like the partnership, the general partnership is a legal personality without legal entity. This means that in the last resort the partners are also liable with their private capital for the debts of the business. But the private creditors of one partner cannot lay claim to the capital of the general partnership, nor to the private capital of the other partners. That is different from the partnership.
Examples of the general partnership
A general partnership is sometimes used in the arts and cultural sector by (set) designers, who want to present themselves under a joint name, advertise together, lease business premises together and agree together how the profit is divided.