Silent partnerships in Macedonia
Macedonia offers numerous opportunities for international business investors. In addition to the low tax environment, governmental incentives for companies operating in the high-tech sector, and other corporate benefits, Macedonian law allows the formation of silent partnerships. The opportunity to become a silent partner may be of interest to persons who would like to receive income without the need to regularly monitor their investment.
What is a silent partnership?
The term “silent partner” refers to the status of a person who provides a monetary or non-monetary contribution to an enterprise owned by another person without actively participating in the day-to-day management of the partnership. The functions of a silent partner may include, for example, infusing capital and providing business guidance. Privacy is the major advantage of being a silent partner. The information about the silent partner does not have to be publicized or disclosed to third parties.
Formation of a silent partnership
Silent partnerships in Macedonia are usually formed by two types of partners, namely, (1) silent partners and (2) public partners. A silent partner can be appointed by signing a partnership agreement which defines not only the contribution of the silent partner to an enterprise but also the relationships between the silent partner and the other partners.
Although silent partnerships do not have independent legal personalities and separate business names, a silent partnership may decide to incorporate a company in which a public partner functions as a shareholder and holds all rights and liabilities arising from company’s business operations.
Silent partner’s liability
The silent partner is entitled to a share of the profits or the losses of the partnership. If not agreed otherwise in the partnership agreement, such a share cannot exceed the amount of the assets which the silent partner agreed to contribute to the partnership. Macedonian corporate law provides a silent partner with a privilege to inspect a company’s annual financial accounts and receive other explanations regarding the company’s financial operations.
Termination of a silent partnership
A silent partnership can be terminated in several cases, e.g., (1) expiration of a time period indicated in the partnership agreement, (2) mutual agreement between the partners, and (3) initiation of a bankruptcy procedure.