The Liability of a Partner with a Guarantee Contribution in a Private Company (IKE)

Legal Insight

December 2024

Maria Tsoukala, Lawyer

Summary: The innovation of the Private Company (IKE) in the corporate law framework lies in its distinctive features that blend elements of a partnership structure with a reduced reliance on corporate capital. Instead of corporate capital serving as the primary means of protecting creditors and ensuring the company's solvency, the IKE allows partners to participate through a "guarantee contribution" rather than a monetary capital contribution. This contribution does not increase the company's assets but creates a "solvency reserve." This article examines the extent of liability for a partner who participates in an IKE with a guarantee contribution for the company's debts.

As stipulated by the law governing IKEs, a partner who participates with a guarantee contribution assumes direct liability toward third parties for any company debts. While it may seem appealing to join an IKE without an upfront financial contribution, thereby safeguarding personal assets, the partner must remain aware that, in the event of unpaid debts, they will be directly and primarily liable with their personal property.

"Directly" and "primarily" means that creditors may pursue the partner directly, without needing to first attempt to satisfy their claims from the company’s assets or prove that such attempts were unsuccessful.

Given the direct liability of a partner with a guarantee contribution toward corporate creditors, it is clear that third parties benefit from the transparency of these contributions. For this reason, the law mandates specific publicity requirements. Beyond the initial registration in the General Commercial Registry (GEMI), the law also requires the regular updating of guarantee contribution records whenever changes occur, such as debt payments reducing the partner's liability.

It becomes evident that such a partner must always be prepared to cover company debts using their personal assets and cannot later seek reimbursement from the company for amounts paid to satisfy third-party claims. This is because such payments are considered fulfillment of their contribution to the company.

Moreover, the partner declares—potentially under criminal liability for fraud—that they are able and willing to fulfill their obligations to pay company debts up to the specified amount. It should be noted that this liability is limited: the partner’s responsibility toward third parties is capped at the amount stipulated in the company’s founding agreement.

With every payment made by the partner toward a company debt, their liability is automatically reduced. This could eventually lead to the exhaustion of their guarantee obligation, after which the partner would no longer be liable to creditors but would still retain their status as a company partner.

Finally, it must be emphasized that a partner who chooses to participate in an IKE with a guarantee contribution should also consider that, even if they exit the company or are expelled, they remain liable to creditors for obligations arising before these events were registered with GEMI. This liability extends for three (3) years from the date of registration, provided the partner has not fully met their guarantee obligation. Additionally, they remain liable for company debts for up to three (3) years following the dissolution of the IKE.

In conclusion:

Anyone can join an IKE without making a financial contribution by providing only a guarantee contribution. However, they must be prepared to fulfill this obligation whenever required, effectively supporting the IKE by paying off one or more of its debts in practice.