This paper describes a new model for the structural behavior of composite beam-columns with partial interaction. This second-order model doesn't make use of the centroid of the transformed cross-section area of the fully composite member, but the centroids of the partial sections are considered regardless of their geometry. In order to avoid numerical instabilities 'exact' shape functions are used to deduce the transfer matrix. The elements of the state vector are carefully selected so that boundary- and transition-conditions can be satisfied consistently. Special effects connected with the calculation of composite beam-columns are discussed. Exact stiffness and transfer matrix for the two-layer composite beam is developed analytically. The buckling loads for all possible boundary conditions of the simple element are stated. The advantages of the present method of calculation are illustrated by applying it to different problems occurring in practice of timber construction engineering.