A limited partnership with an s.r.o. as general partner: how the structure works and where its limits lie

A limited partnership needs at least one general partner, who is liable for its obligations with all their assets (Section 93(1)). For many entrepreneurs that alone is reason enough not to consider it. Both natural persons and legal entities may, however, be founders and members of commercial companies (Section 56(3)), so an s.r.o. may also become a general partner. It is then the s.r.o. that bears unlimited liability with its assets, while its own members are liable for its obligations only up to the amount of their unpaid contributions entered in the Commercial Register (Section 106). The structure has its logic, but its operation must be thought through in detail.

Who acts for the partnership

Business management of a limited partnership is vested solely in the general partners (Section 97(1)), and only they act for it externally:

The statutory body of the partnership is composed of the general partners. Unless the partnership agreement provides otherwise, each general partner is entitled to act for the partnership independently.

— Section 101(1) of Act No. 513/1991 Coll. (unofficial English translation)

Where the general partner is an s.r.o., it is that company which acts for the limited partnership, through its managing directors (Section 133(1)). They must be individuals:

Only a natural person who, at the time the entry in the Commercial Register is made, is not recorded as a debtor in the register of authorisations to conduct enforcement proceedings under separate legislation may be a managing director of the company.

— Section 133(2) of Act No. 513/1991 Coll. (unofficial English translation)

For a limited partnership, the Commercial Register records the partners, specifying who is a general partner and who a limited partner, and also the statutory body together with the manner of acting (Section 10(e) and (j) of Act No. 29/2026 Coll.). Where a legal entity holds the position of statutory body, its business name, registered office, identification number and the dates on which its office began and ended are entered (Section 24(1) of Act No. 29/2026 Coll.). The partnership agreement, too, must state the general partner’s identification number (Section 94(d)).

A limited partner as managing director of the general partner

One possible model is for the investor to be a limited partner and at the same time the managing director of the general partner s.r.o. They thus run the partnership without being personally liable with all their assets. In this arrangement, the capacity in which they sign matters. A limited partner who concludes a contract in the name of the limited partnership without authorisation is liable for the resulting obligations to the same extent as a general partner (Section 101(2)). Acting for the partnership should therefore always take place in the name of the general partner, and its managing director should state this clearly when signing. We examine the wider context in our answer on what a limited partner is liable for.

Restrictions on the general partner s.r.o.

A legal entity may be a partner with unlimited liability in one company only (Section 56(5)). A single s.r.o. therefore cannot be the general partner of several limited partnerships at once, and each structure usually requires its own general partner company. The rules on general partnerships apply mutatis mutandis to a general partner (Section 93(2)), including the non-competition rule, which does not apply to a limited partner unless the agreement introduces it (Section 99). The non-competition rule applying to a managing director of an s.r.o. does not preclude them from serving in the bodies of another legal entity with a similar line of business, where the company in which they are a managing director participates in that entity’s business (Section 136(1)(d)).

Contained risk does not mean that the general partner’s managing directors are free of responsibility. They must exercise their powers with professional care and are jointly and severally liable for damage caused by a breach of their duties (Sections 135a(1) and (2)). The s.r.o.’s claim for compensation for such damage may also be asserted in their own name by a creditor who cannot obtain satisfaction from the company’s assets (Section 135a(5)).

The risk of the partnership being dissolved

The Act protects a limited partnership against events on the limited partner’s side: their death, bankruptcy or dissolution is not a ground for dissolving the partnership (Section 102(1)). There is no such protection where the general partner is concerned. The grounds for dissolving a general partnership apply to them mutatis mutandis, and include the dissolution of a legal entity that is a partner and a declaration of bankruptcy over a partner’s assets or the dismissal of a bankruptcy petition for insufficiency of assets (Section 88(1)(d) and (e)). If the general partner s.r.o. ceases to exist or enters bankruptcy, the limited partnership is dissolved; the remaining partners may, within three months of the dissolution, agree by amending the partnership agreement that the partnership continues (Section 88(2)). Since a limited partnership cannot exist without a general partner, it is sensible to have a procedure for the admission of a new general partner ready in the agreement. The context is examined in the article on a partner’s departure, death or enforcement.

Points to consider when designing the structure

Before formation, it is necessary to settle who will be the managing director of the general partner s.r.o., how the limited partners will vote on matters outside business management (Section 97(2)), how profit will be divided between the general partner and the limited partners, and on what terms the limited partners may sell their interests. The division of profit is examined in our answer on profit distribution in a limited partnership, and an investor’s exit in our answer on transferring a limited partner’s interest. The tax consequences of a structure in which the general partner is a legal entity should be assessed with a tax adviser.

We will form a limited partnership with a partnership agreement tailored to both the general partner s.r.o. and the limited partners as part of our limited partnership formation service. Where the structure forms part of a wider group, our holding structures service follows on from it. A comparison with an ordinary s.r.o. is offered by the article on when a partnership makes sense.