Unlimited liability companies are one of the oldest business structures in existence, since previously many families were organized like this to manage their businesses. Next, we explain what it consists of.

What is an unlimited liability company (SRI)?

The corporate structures can be based on a limited liability agreement, very common in our country, and unlimited liability, less frequent given the personal implications it entails.

The unlimited liability company basically establishes that, regardless of how it was created, all the partners are responsible for the obligations contracted by the company, responding with all their assets in a joint and several and subsidiary manner against the company’s debts with third parties.

Therefore, there is no separation between the assets of the company and that of the employer, so that any obligation acquired by the company will commit each partner to the same extent.

Difference Between Limited and Unlimited Liability

The unlimited liability company, also known as joint and several, assumes that both the assets of the company and that of the partners are committed to the payment of any acquired obligation.

So that there is no separation between the two assets: any commitment that the company acquires It will also bind the partners.

On the contrary, a limited liability company establishes a separation between the assets of the company and that of each of the partners, so that it will only respond for the percentage of its contribution to the company, never with another type of property of its own.

Therefore, in the event of a lawsuit or closing, the partner with unlimited liability can lose both his business and his personal assets, while the partners with limited liability will only lose the assets they have invested in the company, but not their personal assets.

Unlimited liability of a Company

Unlimited liability means that if the company contracts a debt with a third party (supplier, customer, shareholder…) the company’s partners leave their personal assets and patrimony (savings, real estate, etc.) vulnerable to seizures in order to that these obligations contracted by the company are satisfied.

Unlimited Society: Examples

There are several types of SRI:

Individual entrepreneurp: It is a person who habitually, personally and directly carries out a professional activity for profit, without being in charge of anyone.

There are many professionals who are self-employed, from plumbers, to transporters, accountants or landscapers.

Collective society: Several partners come together under a collective name to develop an economic activity. Examples of this type of company range from small neighborhood businesses, such as a hairdresser’s, to law firms, economists, architects, doctors or auditors.

Limited partnership: It has a mixed responsibility, since the managing or collective partners respond jointly and unlimitedly, while the limited partners only for what they have contributed.

Although it is not a very common business formula, it is widely used in fast food or purchase-sale businesses, such as real estate.


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