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Simple English definitions for legal terms
in commendam
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A quick definition of in commendam:
In commendam is a legal term that means property held in a limited partnership. A partnership is when two or more people own and run a business together for profit. In a limited partnership, some people contribute money but don't manage the business, while others do both. The purpose is to limit the amount of money someone can lose if the business fails. This type of partnership is different from a general partnership, where everyone is equally responsible for the business's debts.A more thorough explanation:
Definition: In trust. This term is typically used in civil law to refer to property held in a limited partnership. A limited partnership is a type of partnership where there are one or more general partners who control the business and are personally liable for the partnership's debts, and one or more limited partners who contribute capital and share profits but cannot manage the business and are only liable for the amount of their contribution.
Example: John and Jane start a limited partnership to open a restaurant. John is the general partner and manages the restaurant, while Jane is a limited partner who contributes money but does not participate in the management of the business. If the restaurant incurs debts, John is personally liable for them, but Jane is only liable for the amount of money she contributed.
This example illustrates how a limited partnership works and how the term "in commendam" is used to refer to property held in this type of partnership.