General vs limited partnership in Kosovo

Partnerships are the oldest and simplest form of business cooperation: two or more people combine work and money. In the ARBK data on Kerko there are about 4,341 general partnerships and only 109 limited partnerships, far fewer than the 60,000 LLCs. Here is why.

General Partnership (O.P.)#

A general partnership is founded by two or more partners (individuals or legal persons) doing business together.

Key features:

• Unlimited, joint and several liability. Each partner is liable with all their personal assets for all of the partnership's obligations, not just "their share". If the partnership owes a bank €50,000, the bank can claim the full amount from any partner.
• Each partner can usually bind the partnership. A contract signed by one partner can oblige all of them, unless the agreement and registration restrict this.
• The partnership agreement is the key document: contributions, profit split, decision-making, a partner leaving.
• Tax: profit is usually attributed to the partners and taxed under ATK's rules for partnerships.

When it makes sense: partners who trust each other completely, with low financial risk, for example two professionals sharing an office or a small family business.

Limited Partnership (O.K.)#

A limited partnership has two kinds of partner:

• at least one general partner, who manages the business and has unlimited liability;
• at least one limited partner, who contributes capital and risks only that contribution.

The limited partner usually does not take part in day-to-day management. If they start running the business like a general partner, they can lose their limited-liability protection.

When it makes sense: when someone wants to invest money in another person's business without being involved in management and without risking more than the investment, for example a family investor financing an active partner.

Compared with an LLC#

	O.P.	O.K.	LLC (SH.P.K.)
Minimum number of owners	2	2 (1 general + 1 limited)	1
Liability	Unlimited for all	Unlimited for general partners	Limited for all
Who manages	The partners	The general partners	The authorised persons
How common in Kosovo	~4,300	~110	~60,000

Why are partnerships rarer?#

Because an LLC gives better protection with little extra paperwork. An LLC with two owners and a good agreement between them achieves everything a general partnership does, without putting each partner's home at risk. So for most new partners, the LLC is the safer choice.

Partnerships remain useful when partners want maximum simplicity and the risk is low, or when the specific structure of a limited partnership (passive investor + active manager) matches the situation exactly.

If you choose a partnership#

1. Write the partnership agreement carefully: contributions, profits, decisions, departure, death or incapacity of a partner.
2. Limit signing authority: who can sign what, and register this where the law allows.
3. Register with ARBK with the partners' identity documents and the agreement.

For a comparison of all forms, see Business legal forms in Kosovo. You can also browse the general partnerships and limited partnerships registered on Kerko.