The SNC and SComm in Belgium: Everything About Partnerships

What Is a Partnership?

Partnerships differ from capital companies by the importance given to the person of the partners rather than capital contributions. In Belgium, the CCA recognizes two main forms:

• The SNC (General Partnership): all partners are jointly and severally liable
• The SComm (Limited Partnership): two categories of partners with different liabilities

Common Characteristics

• No minimum capital required
• No obligation to use a notary (private deed possible)
• Shares not freely transferable (other partners' consent required)
• Dissolution possible through death or withdrawal of a partner
• Transparent taxation possible (personal income tax)

The SNC: General Partnership

Definition and Characteristics

The SNC is a company in which all partners are merchants and are liable on an unlimited and joint basis for the company's debts.

Partner Liability

This is the major characteristic of the SNC:

Advantages of the SNC

• Simple formation: no notary required, no minimum capital
• Low costs: very low formation costs
• Flexibility: very flexible articles, free organization
• Credibility: unlimited liability reassures business partners
• Tax regime: option for tax transparency

Disadvantages of the SNC

• Asset risk: all personal assets are at stake
• Joint liability: each partner is liable for all debts
• Intuitu personae: death of a partner may lead to dissolution
• Difficult transfer: unanimous partner agreement required

The SComm: Limited Partnership

Definition and Structure

The SComm combines two categories of partners:

• General partners: active managers, unlimited and joint liability
• Limited partners: passive investors, liability limited to their contribution

Comparative Table of Both Partner Types

The Non-Interference Rule

A limited partner may not interfere in the management of the company, even by proxy. If this rule is violated, the limited partner becomes jointly liable like a general partner for the obligations resulting from such interference.

Advantages of the SComm

• Separation of management/investment: ideal for attracting passive investors
• Protection of limited partners: liability limited to contribution
• Flexibility: no minimum capital, simple formation
• Estate planning: useful for succession planning
• No notary: private deed possible

Disadvantages of the SComm

• Risk for general partners: unlimited liability
• Restriction on limited partners: prohibition on management involvement
• Relational complexity: two categories of partners with different interests

When to Choose a Partnership?

The SNC is ideal for:

• Associated liberal professions (lawyers, architects, doctors)
• Small family businesses based on trust
• Commercial partnerships between complementary professionals
• Activities where unlimited liability is a commercial advantage

The SComm is ideal for:

• Real estate projects (general partner = developer, limited partners = investors)
• Family succession planning
• Asset holding structures
• Combining an active manager with passive investors

Tax Aspects

Corporate Tax vs Tax Transparency

Partnerships have the choice:

• Opaque regime: corporate tax (25%, reduced to 20% for SMEs on the first €100,000)
• Transparent regime: profits are directly taxed in the hands of the partners (personal income tax)

When to Choose Transparency?

• Low-profit activity (marginal PIT rate below 25%)
• Expected losses in the first years (offset against partners' other income)
• Non-resident partners benefiting from double tax treaties

Comparison with the SRL

Conclusion

Unsure between a partnership and an SRL? LegalBelgique analyzes your situation and recommends the most suitable legal form for your project, risk profile, and tax objectives. Free consultation with no obligation.