In recent years, we have witnessed a rediscovery of the simple partnership, a traditional institution in our legal system, for the management and transfer of family assets. In the case of financial investments, in particular, while many individuals choose to invest personally, the establishment of a simple partnership can offer various advantages for those who wish to hold and manage financial portfolios in a more structured and flexible manner.
In this article, we will explore the benefits of using a simple partnership for managing financial portfolios.
What is a Simple Partnership?
A simple partnership is a form of a partnership, often used by professionals to collaborate and conduct activities jointly. One of the main features of a simple partnership is its flexibility: it does not require a minimum initial capital, is easy to establish, and does not involve formalities, including the absence of the obligation to keep accounting records and deposit the financial statements with the Chamber of Commerce. Additionally, the liability of the partners can be limited if some partners are not involved in the management of the partnership: the only party that will always remain unlimitedly responsible is the administrator who has acted on behalf of the partnership.
Advantages of Using a Simple Partnership for Holding Financial Portfolios
1. Separation of Assets: One of the main reasons investors opt for a simple partnership is the ability to separate their personal assets from those of the partnership. This is particularly useful in the context of managing financial portfolios, as it allows for a clear distinction between personal and partnership investments.
2. Flexibility in Structuring the Investment: A simple partnership allows partners to flexibly decide how to structure their investments. This means that rules and investment strategies can be defined based on the specific needs of the partners, without the restrictions often associated with other forms of partnerships.
3. Global Wealth Management: In a simple partnership, partners can pool financial and human resources for portfolio management. This can lead to greater investment diversification, in-depth analysis, and better risk management. Additionally, the simple partnership can act as a wealth aggregator, consolidating all family investments into a common position, a solution that can result in significant reductions in the management costs of individual accounts and better performance.
4. Favorable Taxation: Simple partnerships are taxed favorably compared to other corporate structures and are not subject to presumptive tools for income determination. Profits are divided among the partners and taxed individually, avoiding the double taxation typical of joint stock partnerships.
5. Facilitated Succession Planning: Finally, simple partnerships offer advantages in terms of succession planning, allowing for a smoother transition of ownership and financial portfolios in the event of a partner’s death. It is also possible to establish, from the formation of the simple partnership, the destination of ownership assets, dividing shares into bare ownership and usufruct.
Conclusion
In conclusion, using a simple partnership for holding financial portfolios can offer a range of advantages, including asset separation, flexibility in investment management, and favorable taxation. However, careful planning, assistance from experienced professionals, and close attention to the clauses of the partnership agreement are crucial to fully exploit the benefits of this corporate structure. The simple partnership can be a suitable choice for those seeking a flexible option to efficiently manage their financial investments.
