Commercial Law
Management of General Partnerships and Resulting Liabilities under the Jordanian Companies Law
A legal summary explaining the formation and management rules for general partnerships (sharikat al-tadamun) in Jordan, and the core features of partners’ personal and joint liabilities. The summary focuses on practical aspects of appointing managers, their powers and duties, accountability procedures, and the partnership’s relations with creditors and third parties under the cited statutory provisions.
Updated: 26 January 2025
Prepared and reviewed by: Ashraf Al-Khawaja
1. Definition of a General Partnership and Its Core Features
Under Jordanian law a general partnership is founded on personal relations among partners and is marked by partners’ unlimited and joint liability for the partnership’s debts. The legislation sets practical features such as a presumptive upper limit on partners (up to twenty, with exceptions for heirs), the requirement of a trade name reflecting the partners, partners’ automatic acquisition of merchant status upon joining, and the general rule that shares are not transferable to outsiders without partner consent unless the partnership agreement provides otherwise.
2. Management Arrangements and Appointment of Managers
Management is generally vested in all partners unless the articles of association designate specific authorised managers; the company may appoint one or several managers who may be partners or third parties. Where no manager is named and the partnership is small, partners may manage jointly by agreement; if a manager is appointed in the constitutive contract, removal follows the same contractual method or requires unanimous consent, while managers appointed later may be removed by partner majority or by court order for cause. Procedurally, authorised managers’ names should be registered and changes notified within the statutory timeframes.
3. Manager’s Powers, Duties and Practical Limits
A manager’s authority is defined by the partnership agreement, or otherwise by the partnership’s objects and commercial custom; it covers administrative acts and disposals necessary to run the enterprise. The manager must act faithfully and diligently, protect the partnership’s interests, and provide regular accounts and information to partners; a partner-manager may not receive remuneration without partner approval. Practical limits include prohibitions on self-dealing that harms the partnership, competing activities, and undertaking major corporate acts (e.g. share transfers or amendments to the partnership agreement) without unanimous partner consent or contractual authorisation.
4. Manager’s Liability, Civil Remedies and Practical Sanctions
A manager is liable to compensate the partnership for losses caused by negligence or breach of delegated authority; some claims lapse five years after the manager’s service ends, although certain breaches (e.g. undeclared personal gains or misappropriated assets) trigger separate accounting and restitution duties within shorter statutory deadlines. Partners or the partnership may sue for damages, and criminal liability may arise where other laws so provide. In practice, maintaining records, transaction evidence and timely accounts is essential to support defenses or recovery claims.
5. Company’s Liability to Third Parties and Practical Consequences of Managers’ Acts
The partnership is bound by acts performed by an authorised manager in the name of the company and within its objects, and where a manager exceeds authority a third party acting in good faith may still hold the partnership liable, while the partnership retains a right of recourse against the manager. The partnership also bears expenses or losses incurred by a manager in pursuing its business or protecting its assets, even without prior partner approval. Practically, clear external notification of managers’ authority and proper registration reduce litigation risk and protect both third parties and the partnership.
Legal notice
Disclaimer: This summary is for general educational purposes and is based on the article linked on the page. It does not substitute for the statutory text or advice from a licensed lawyer; verify the current legislation, any subsequent amendments, and applicable filing deadlines and procedures with official authorities before taking action.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.