SNC is an abbreviation for "Société en Nom Collectif," a French term that translates to "Partnership Company" or "Collective Name Company" in English. It refers to a specific type of business structure where two or more individuals, known as partners, join together to form a company.
In an SNC, the partners invest capital, skills, or other resources into the company, with the goal of generating profits and sharing them based on the agreed-upon terms stipulated in a partnership agreement. This agreement outlines the rights, responsibilities, and liabilities of each partner, as well as the roles they play in managing the company's operations.
One key characteristic of an SNC is that the partners have unlimited liability for the company's debts and obligations. This means that their personal assets may be used to settle any debts or legal claims against the business. Additionally, partners in an SNC are usually jointly and severally liable, meaning that they are individually responsible for the company's debts as a whole, not just their proportional share.
SNCs are often favored by professionals, such as doctors, lawyers, or accountants, who wish to collaborate and share resources to run their practices. They also offer flexibility and a simplified administrative process compared to other more formal business structures.
Overall, an SNC is a partnership company where two or more individuals come together to form a business, sharing profits and liabilities according to a partnership agreement.
