I’m Back– (Re)Introduction Of Silent Partnerships (Light)?

Proposed amendment to the Slovenian Commercial Company Act

Already back in July 2014, the Slovenian Ministry of Economic Development and Technology introduced a proposal for amending the Slovenian Commercial Companies Act (Zakon o gospodarskih dru~bah; "ZGD-1I"). Apart from the aim of transposing certain pieces of EU legislation regarding financial reporting (e.g. the Directive 2013/34/EU), the proposal also brings certain novelties with regard to (i) the establishment of commercial companies, (ii) (further) limitations regarding the acquisition of own / treasury shares, and, most interestingly, (iii) the (re)introduction of the silent partnership concept.

(Silent) partnership under Slovenian corporate law

Currently, Slovenian corporate law does not foresee the possibility of creating silent partnerships, a concept known in other jurisdictions as "stille Gesellschaft" (Austria and Germany), "associazione in partecipazione" (Italy), or "tajno druatvo" (Croatia). Thus, the effects of such silent partnerships can currently only be created on a purely contractual basis (without having any corporate law effects).

However, this has not always been the case. The initial ZGD enacted in 1993 (as well as the ZGD-1 enacted in 2006) contained comprehensive provisions governing such silent partnerships (tiha dru~ba), which were created by way of a partnership contract with certain corporate law effects, on the basis of which the silent partner, through a contribution of assets to the holder company's undertaking, obtained the right to participate in the holder company's profits. As in other jurisdictions, such silent partnership had no own legal personality (and was, thus, also not considered a legal entity), but was merely an association of partners creating a special form of a contractual obligation with corporate law effects. As such, neither the (silent) partnership nor the silent partner could hold a position vis-a-vis third persons; rather, it was only the holder company itself that was the exclusive holder of all rights and obligations deriving from the operations of the partnership. Most importantly, the silent partner had no formal corporate role in the holder company and had no right to participate in its decision making process.

As the name itself implies, the fact that a company operates with a silent partner was neither publicized nor disclosed to third persons, unless explicitly foreseen in the company name of the holder company (however...