A Limited Partnership Company in Jordan (Sharikat Al-Tawsiyah Al-Basita) is a unique business structure governed by the Jordanian Companies Law. This type of company consists of managing partners who oversee company operations and assume full liability, and silent partners who contribute capital without participating in management. In this guide, we explain the legal requirements, partner responsibilities, capital structure, management rules, and key articles that regulate Limited Partnership Companies in Jordan.
What is a Limited Partnership Company in Jordan?
A Limited Partnership Company is formed between two categories of partners:
- General Partners (Active Partners): manage the company and are fully liable for debts.
- Limited Partners (Silent Partners): contribute capital and are liable only up to the value of their shares.
This structure allows investors to join a business without taking on management responsibilities or unlimited liability.
Legal Basis
Limited Partnership Companies in Jordan are regulated primarily under Articles 41 to 48 of the Jordanian Companies Law. These articles outline formation requirements, liability rules, partner roles, management limitations, and name restrictions.
Partner Roles & Responsibilities
General Partners
General partners:
- Manage and operate the company
- Represent the company legally
- Hold unlimited joint liability for debts and obligations
Limited Partners
Limited partners:
- Contribute capital
- Do not manage the company
- Are liable only up to the value of their investment
However, if a limited partner participates in management, they immediately become fully liable like a general partner.
Company Name Rules
The company name must include only the names of the general partners.
If the name of a limited partner appears in the company title voluntarily or knowingly, that partner becomes fully liable to third parties relying on the name in good faith.
Transfer of Shares
A limited partner may transfer their share freely without the approval of general partners, unless the contract states otherwise.
However, to convert into a general partner, unanimous approval from existing general partners is required.
Adding a New General Partner
A new general partner may be added if all (or most, based on the company contract) general partners approve. Limited partners are not required to approve this decision.
Management and Decision-Making
General partners have full authority over company decisions, including:
- Business operations
- Financial structure
- Dispute resolution
- Contract amendments
No change to the partnership contract is valid unless approved by all general partners.
Company Continuity
The company is NOT dissolved if a limited partner:
- Dies
- Loses legal capacity
- Declares bankruptcy
- Becomes insolvent
Legal Similarity to General Partnership
When the law does not specify a rule for Limited Partnership Companies, the legal rules governing General Partnerships apply.
Looking to register a Limited Partnership Company in Jordan?
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