Solar greenhouses in Spain

Spain, with its warm climate and abundant hours of sunshine, offers ideal conditions for the use of solar greenhouses. These special greenhouses are designed to make optimum use of sunlight while providing plants with the necessary protection from extreme weather conditions. As we are also frequently involved in the sale of agricultural land, sustainable agriculture is always an exciting future field for us.

The use of solar greenhouses in Spain has increased in recent years, especially in the commercial sector. Large agricultural businesses and mega-projects have recognized that this method is not only environmentally friendly, but also offers considerable advantages.

Cultivation area for solar greenhouses in Spain

The cultivation area for solar greenhouses in Spain has increased considerably in recent years. This is mainly due to the growing demand for sustainably grown food and the increased use of renewable energy sources. Large agricultural companies and mega-projects are increasingly investing in solar greenhouses in order to increase their yields and reduce their environmental footprint at the same time.

How a solar greenhouse works

This video explains the important considerations and elements when building a passive solar greenhouse. These include positioning in relation to solar radiation, choice of glazing (polycarbonate), building materials (wood and fiber cement panels), insulation, thermal mass, ventilation options, preparation of planting beds and automation of processes such as ventilation and irrigation. This overview provides useful information for building an efficient passive solar greenhouse.

Example of agriculture in Almería: challenges and opportunities

Almería, a region in Spain, is known for its plastic greenhouses, which cover an enormous amount of land. These greenhouses play a crucial role in supplying Europe with fruit and vegetables, and they provide between 40 and 50 percent of these products. However, intensive agriculture in Almería has both positive and negative aspects. I recommend the video below on the subject.

Positive impact on the economy and technology

The greenhouses in Almería have brought an economic boom to the region. They enable year-round production and contribute to economic development. State-of-the-art technology is used to increase productivity and minimize the need for pesticides.

Working conditions and social controversies

Despite their economic importance, the working conditions in the greenhouses are controversial. The predominantly immigrant workforce often faces low wages, insecure employment and health risks from pesticides. This has led to public controversy and social challenges.

Environmental impact and sustainability

Intensive farming in Almería also has an environmental impact. Plastic waste and pesticides pollute the environment. Nevertheless, progress is being made in water use and recycling in order to minimize the environmental impact. The region uses less water per capita than many other regions in Spain.

Consumer behavior and demand

The demand for cheap, year-round fruit and vegetables in Europe has driven intensive farming in Almería. Consumers play an important role in this model, as they demand low-priced products.

Intensive farming in Almería has both positive and negative aspects. It provides Europe with an abundance of fruit and vegetables, but the working conditions and environmental impact are controversial. The future of this agriculture depends on the willingness to tackle these challenges and raise consumer awareness of their impact.

Fighting pests in an ecological way

Almería benefits from abundant sunshine, even in winter, which makes it possible to harvest ripe peppers and tomatoes all year round. This locational advantage has led to an increase in organic farming in the region in recent years. According to Yamato (source: YouTube), who works for the Association of Vegetable Growers in Almería:

“the proportion of land under organic cultivation has risen from 1.4 percent to an impressive 10.3 percent and continues to show strong growth.”

In the greenhouses of Almería, biological pest control is used to reduce the use of pesticides. Various predatory insects such as predatory mites, ladybugs and lacewings are used to keep pests such as aphids at bay. This ecological approach helps to minimize the environmental impact of agriculture.

More on this in a moment.

Mass with class! Almería from above

Despite these positive aspects, there are also challenges. In the hot months, pests can multiply quickly and cause considerable damage to the plants. The use of plastic in agriculture, which is used to cover greenhouses, also has an environmental impact. One solution is to fully recycle the plastic and work on optimizing water consumption.

Sustainable fruit and vegetables from Europe

Another example is the program“It’s Greenhouse. Sustainable fruit and vegetables from Europe” provides a range of key figures and information on sustainability and its application in the Spanish fruit and vegetable sector. Here are some of the key figures:

Growth of solar greenhouse cultivation

The area of solar greenhouses in southern Europe, particularly in the Spanish region of Andalusia, has grown from 515 hectares in the 2006/2007 season to more than 27,863 hectares in the past 2022/2023 season.

Biological pest control

The program emphasizes the use of biological pest control in the solar greenhouses. This includes the use of auxiliary fauna to control pests and diseases without using synthetic pesticides.

Top 7 products with biological pest control

The top list of natural pest control:

1. Paprika leads the way in the use of biological pest control with 100% of its area,
2. Followed by tomatoes,
3. Cucumbers,
4. Eggplants,
5. Zucchini,
6. Watermelons
7. Melons

Sustainable agriculture and renewable energies

Solar greenhouses have become an important element of sustainable agriculture and renewable energy in Spain. The area under cultivation is growing steadily and their benefits are attractive for mega-projects and agricultural companies alike. The combination of energy efficiency, year-round cultivation and environmental protection makes this cultivation method a promising solution for the future of agriculture in Spain.

Land sale Berlin: Learn the procedure

There are various factors that influence the value of a plot of land, depending on whether it is a meadow or forest plot, agricultural land, raw building land, land awaiting construction or building land. On the one hand, of course, the intended use of the land, the possibilities of building on it and, of course, one of the central value factors: the location of your land. Regardless of whether it is a building plot, land for construction, forest land or agricultural land in the Berlin area, the same questions always arise for sellers and property owners!

This is where our guide or guidebook comes in, which brings the sale of land, including the valuation of the land, piece by piece closer.

The right time: credit pressure, old age, inheritance

As different as the reasons are, the process of selling real estate is always relatively the same. Broadly speaking, it involves 3 phases: 1) the preparation for the sale of the property, 2) the marketing phase and 3) the completion of the sale.

Reasons for selling a property are many and varied. As mentioned above, it can be a sudden inheritance and confronting a property that may not even be in your immediate area. Even if it is right next door, what do you do with that property? Apart from inheritance, there are of course many other reasons, for example financial pressure due to existing loans, as well as old age.

Either way: Timing is key so there is no pressure to sell. Ideally, you inform yourself now because you want to sell in 3 or 4 months. If you need to sell sooner, it is advisable to approach domestic investors, foreign investors, institutions, construction companies directly through experts in off market trading. More on this later.

Advantage Berlin: Hype of the city

Berlin attracts investors like no other city in Europe. Berlin is located in the middle of the many countries that are part of the European Union. Berlin is also relatively central in Germany and is easily accessible from cities like Munich, Hamburg and Cologne, by car, train and plane. As the capital city, it is not only interesting for tourists and business, the country’s major politics are also at home here. You see: Many, different target groups!

This in turn supports the sale. Sell in districts such as Schöneberg and Wannsee or in trendy neighbourhoods such as Kreuzberg, Friedrichshain and classy districts such as Grunewald and Weißensee.

Sale in 3 phases: Preparation, marketing and closing of the sale

You may have already read about these 3 phases, with their individual steps, in our guide to selling property.

This additional guide to selling land in Berlin is specifically for those selling their first property. In addition to the phases, we also take a look at the property valuation (location, layout, size, development, etc.), the general and more specific documents and records needed for the sale and … but let’s start at step 1:

The preparation of the sale

Prepare land sale: Planning and strategy

The preparation phase is concerned with strategic planning, as with the sale of an apartment or house. The preparation phase is crucial for the success of the sale, here it is about the right timing, the selection of the right broker (for the right target group, as mentioned above), important documents and records for the sale, from which ultimately the offer price (land value) is calculated. No matter whether building plot, forest, field or acre.

Berlin is a sought-after place. At the same time, as a (first-time) seller, you can make an extremely large number of mistakes that ultimately cost you a lot of money. A loss of only 15% on a property worth 5,000,000 euros can result in a loss of 750,000 euros. And we are not even talking about properties in Berlin Mitte. You can achieve such prices in Berlin Pankow, for example.

But back to step 1 in the preparation:

1. Set time schedule
2. Make an appointment with a real estate agent
3. Collect documents
4. Prepare property
5. Determinequotation price
6. Create exposé

Timing and broker selection

First of all there is the time planning. For the sale of a property you should calculate with at least 3 months, from the first thought to the notary appointment and transfer of the purchase price. Of course, it can go faster (the mentioned, direct and discreet investor approach in the off market area), but we want to give a general overview here!

At least 3 months time, until the sale, does not mean that it is also sold after three months. Here, above all, the decision for the right real estate agent plays a role, as well as the valuation of the property. If the valuation is set too high, you will lose interested parties for your property offer – even in Berlin!

Generally speaking, selling under time pressure is never a good option.

Real estate prices in this country are relatively high and stable in almost all locations, after all, it is one of the strongest real estate markets in the world. Berlin in particular has been experiencing a boom for a long time. Square meter prices in Berlin are rising, even though the city government is fighting against it. Measures against “speculators” (investors) are, for example, the Mietpreisbremse (albeit recently overturned), ordinances on renovation and modernization, conversion of rental housing to condominiums, etc.

Berlin: Price development (comparison)

The goal of most investors: to develop land. That means: the more residential units, the more buildable floor space, the better. This is also evident when looking at the price being asked for a square metre of condominiums in Berlin.

The development of asking prices for condominiums in Berlin, from 2012 to the 1st quarter of 2021 are enormous. Here is an insight into the average price, in euros per square metre.

• 2012 (Q1): 1,671 Euro / m²
• 2015 (Q1): 2.321 Euro / m² (+ 38.9%)
• 2017 (Q1): 3.154 Euro / m² (+ 35.9%)
• 2019 (Q1): 3,897 euros / m² (+ 23.5%)
• 2021 (Q1): 4,781 Euro / m² (+ 22.6%)

From 1st quarter 2012 to 1st quarter 2021, a total increase of + 168.1 %.

Sell land privately?

From my experience without expertise through previous sales, a real experiment and venture, where many mistakes can arise in the sale of property. Often it is then recommended to accept the help of the real estate lawyer, because he knows better with the tax savings in the sale of real estate, finances & Co.

If you’re interested in the dangers that can happen from selling property privately, here’s our list of the typical, 15 mistakes when selling real estate. Condo, house, apartment building, land:

• Mistakes in the sale of real estate

So let’s summarize briefly: If you sell off market to well connected brokers, it can be very quick, sometimes under 30 days to transaction, thanks to targeting investors in the internal network. When selling via real estate portals, it’s more like 3 months and a lot of communication with private individuals, plus credit checks, etc.

After scheduling and choosing a good real estate agent, move on to the documents and paperwork they will need for the property sale.

Documents and records for the sale of land

The documents are prepared early, because they also serve for the valuation of the property, we will come to that in a moment.

Reading Tip: Selling Property: Documents

As a rule, before you sell a property, you need the following documents:

1. Cadastral map or real estate map from the cadastral office
2. Development plan
3. Land register extract Land registry
4. Land use plan
5. Preliminary building application
6. Information on building encumbrances
7. Development proofs
8. Notice of land tax

Prepare the land? Shouldn’t the next step be the property valuation and the offer price? No, because by no beauty corrections the price can be corrected often still a little upward. No picture has been taken yet, no exposé and no investor has been approached.

Increase in value before property valuation

Here is a small example from practice: When I speak with my investors, these are usually larger companies, institutions or family offices. Accordingly, a person is quickly sent from somewhere in the country, who quickly makes an overview of the property, live on site. Just like that, quickly by car, a few meters on foot.

For the exposé, for the valuation but also for such spontaneous viewings, it is worth taking a look at ways in which you can still increase the value of your property. From simple “beauty corrections” to preparatory measures for further development.

In our example from practice it was about a property from Berlin. Who knows Berlin knows that empty properties, without security measures, are quickly littered. If even apartment buildings in Berlin are occupied, then no properties are safe.

It’s just little things, but just as an increase in the value of the property, through small beauty corrections or renovations is achievable, can also optimize properties before the property photos, before the valuation, before the first visits. Thus the value can be increased with the property sale, in which you for reorganization work a craftsman, or for small rebuilding measures an architect in Berlin to rate pull. It is not about 5%, 10% increase in value, but even an increase in value of 1%, 2%, makes a property of 1 million market value already a significant proportion, which you can pocket as a seller profitable for themselves.

Offer price: Determine property value (valuation)

The valuation of a plot of land is subject to various factors, just like the valuation of any property. The following factors, among others, are decisive for the valuation of land.

First, as with any property, is location.

Location, location, location … also for Berlin properties

This is also about the development and transport links. The next factor in land valuation is the size of the plot. But size is not everything, the layout also plays a role. In addition to size and layout, there is of course also the development, soil condition, standard ground value, as well as possible contaminated sites and third-party rights.

Exact details should always be discussed and worked out in cooperation with your advisor (broker).

In addition to the location and size, of course, it becomes much more specific: Are we talking about building land, are we talking about soil samples, are we talking about forest land, then also climatic changes, to agricultural land and so on. The land valuation is therefore not as easy to summarize as the apartment valuation or the house valuation.

Value factors: checklist

The factors are important for the evaluation:

• Location of the property
• Size and cut
• Development of the area
• Soil composition
• Degree of development or buildability
• Legacy
• Third-party rights
• Ground value

Property types

In addition, depending on the property, still value factors in the area of the development. Depending on which possibilities are available for the construction.

• Forest or meadow land; if necessary, no construction is allowed
• Land awaiting construction; may be built on in the foreseeable future
• Undeveloped land; land not yet developed
• Building land; development possible within the framework of the development plan

Preparation for the sale of land – Conclusion

Here is a summary of the individual steps. A simple checklist, consisting of 6 key points, which will bring you closer to the process of selling a property.

1. Timing
2. Broker appointment
3. Documents
4. Prepare property
5. Offer price
6. Exposé

When it comes to property valuation, there are a number of factors that come into play. The complexity of each individual property valuation, we can not convey in this general guide, but we can give you this tip, ask yourself the following questions:

• What type of land are you selling? Is it a building plot, a forest plot, agricultural land,…
• How big is your property?
• What type of use is intended for your property?
• How can your plot be built on? This means building footprint (BGF) and house type and / or apartment type
• What are the transport links to the location of your property?

Berlin: Real estate in the capital

Capital, university city, historical stronghold and as an international location an attractive place to live for families, couples, singles and students. Accordingly, Berlin faces a continuously growing population due to immigration.

Berlin real estate market: overview

Berlin offers everything from fashion, art, finance, start-ups, and the list goes on. There is hardly a person who would not find their passion in this city of 3.75 million. This is also evident in the sprawl of the city and the different districts. For this reason it is often described as’ many cities in one’. A walk through Berlin-Mitte is very different from Kreuzberg and Prenzlauer Berg is not often confused with Zehlendorf.

• Real Estate Berlin

Living in Berlin: Popular residential areas

We present the most beautiful districts of the German capital and tell you where you can buy the best, highest quality and most exclusive properties to set up your new home, or which districts are best suited to invest in a property as an investment. Here we present the most popular residential areas – from upscale Grunewald to charming Schmargendorf and quiet Dahlem to historic Charlottenburg. Back to overview: Living in Berlin.

• Grunewald
• Charlottenburg
• Zoo
• Dahlem
• Schmargendorf
• Prenzlauer Berg
• Kreuzberg
• Kurfürstendamm

Selling real estate in Berlin: house, apartment and land

As an international location, Berlin is an attractive place to live for people from all over the world. While the district of Wilmersdorf in Charlottenburg convinces with its well-kept green spaces, the residential areas of Prenzlauer Berg and Weißensee in Berlin-Pankow inspire with their unbeatable prices and central location. You want to sell your apartment, your apartment building or your property in the world metropolis Berlin? With our free guides and tips on the topics of real estate sales and property valuation, you are well prepared. Back to overview: Selling real estate in Berlin.

• Pankow
• Charlottenburg
• Wilmersdorf
• Friedrichshain-Kreuzberg
• Prenzlauer Berg
• Kreuzberg
• Wannsee
• Steglitz
• Schöneberg

Partnership limited by shares (KGaA) – formation, financing, liability & Co

The partnership limited by shares – abbreviation: KGaA – is a relatively unknown form of corporate law and is formed as a hybrid of the conventional limited partnership – short: Kommandite or KG – plus the classic stock corporation – short: AG. Both the Kommandite and the AG belong to the so-called complete companies and are therefore primarily subject to the German Commercial Code (HGB). The limited partnership belongs beyond that however to the partnerships and has no own legal personality. The stock corporation, on the other hand, is probably the best-known corporation of all and is primarily committed to share trading.

The KGaA adopts the best features of both legal forms: it takes a stock corporation as its basic structure and supplements it with the structure of general partners and limited partners that is characteristic of the KG. Thus, the entrepreneurial management – similar to the AG – is divided into different bodies, whereas the liability risk is distributed among at least one personally liable partner and the remaining partners in the amount of their capital contribution. Although the partnership limited by shares is a limited partnership in name and suggests the legal status of a partnership, beware: it is in fact a corporation by virtue of its legal form, including its own legal personality!

Other typical corporations:

• Stock corporation (AG)
• European Company (Societas Europaea, abbreviated to SE)
• Entrepreneurial company / UG (limited liability)
• Limited liability company (GmbH)

Corporation KGaA – Stock Corporation Act §§ 278 – 290 & §§ 161 – 177a German Commercial Code (HGB)

In principle, the legal basis for partnerships limited by shares is the German Stock Corporation Act (Aktiengesetz, AktG), more precisely: paragraphs 278 to 290, where, among other things, the nature of the KGaA is defined. For the legal position of the individual partners, on the other hand, reference is made to the applicable provisions for conventional limited partnerships, which are found in the German Commercial Code (HGB) – sections 161 to 177a.

Excerpt from the law – § 278 AktG:

(1) A partnership limited by shares is a company with its own legal personality in which at least one partner has unlimited liability to the company’s creditors (general partner) and the others have an interest in the share capital divided into shares without being personally liable for the company’s obligations (limited shareholders).
(2) The legal relationship of the general partners among themselves and vis-à-vis the entirety of the limited liability shareholders as well as vis-à-vis third parties, namely the authority of the general partners to manage and represent the partnership, shall be determined in accordance with the provisions of the Commercial Code on limited partnerships.
(3) In all other respects, the provisions of the First Book concerning the stock corporation shall apply mutatis mutandis to the partnership limited by shares, unless otherwise provided for in the following provisions or in the absence of a management board.

Kommanditgesellschaft auf Aktien – International distribution of the legal form

The partnership limited by shares – abbreviated to KGaA – is where the legal form of a stock corporation and the typical features of a limited partnership meet. The resulting hybrid of a corporation and partnership features has so far been rather rare in Germany, although interest has been slowly but steadily increasing since the end of the 1990s. The partnership limited by shares also appears internationally, for example as a “commercial partnership limited by shares” in English-speaking countries or as a “société en commandite par actions” in France.

International distribution of the KGaA:

• Anglophone region: Commercial partnership limited by shares
• Belgium: Commanditaire vennootschap op aandelen (CommVA)
• Denmark: Partnerselskab (P/S) or Kommanditaktieselskab
• Germany: partnership limited by shares (KGaA)
• France: Société en commandite par actions (SCA)
• Italy: Società in accomandita per azioni (S. a. p. A. / S. A. A.)
• Iceland: Samlagshlutafélag (slhf.)
• Netherlands: Commanditaire vennootschap (CV)
• Poland: SpóÅka Komandytowo-Akcyjna (S. K. A.)
• Portugal: Sociedade em Comandita por acções (SCA)
• Spain: Sociedad comanditaria por acciones

Legal form variant Kapitalgesellschaft & Co KGaA – General partner as legal entity

Sometimes different corporations also appear in combination with a partnership limited by shares (KGaA). For example, family businesses occasionally organise themselves as a Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft auf Aktien – in short: GmbH & Co KGaA. In this case, they form a stock corporation in the legal sense – however, the general partner as personally liable shareholder is not just any natural person, but specifically a limited liability company (GmbH). If the general partner is instead embodied by an AG, it is referred to as an AG & Co KGaA, and in the case of a Societas Europaea, as an SE & Co KGaA.

More about the individual hybrid forms:

• GmbH & Co KGaA – see limited liability company (GmbH)
• AG & Co KGaA – see stock corporation (AG)
• SE & Co KGaA – see Societas Europaea (SE)

CEWE Stiftung & Co. KGaA is a special case: In this company, the general partner is embodied by a foundation. In principle, the partnership limited by shares is possible in all conceivable combinations, as GUB Investment Trust KGaA points out as an example.

Continue reading here on the topic of setting up a family foundation:

• Establish a family foundation

Foundation, company name & organs of a KGaA

The formation process of a partnership limited by shares is based on the formation process of stock corporations. Accordingly, a KGaA is considered a legal entity and can only participate in legal transactions through its executive bodies. Unlike the conventional stock corporation, however, this legal form does not provide for a management board as the governing body, so that the governing bodies of a KGaA are limited to the general meeting – consisting of the total of the limited liability shareholders – and the supervisory board. The management authority and the power to represent the company externally are incumbent on the general partners as personally liable partners.

You can find out here how the process of founding an AG works in detail:

• Formation of a public limited company

A personally liable partner can be either a natural person or a legal entity, which limits his liability to the business assets of the corporation and cleverly avoids personal liability. The limited partners or limited shareholders can also be natural persons or legal entities and are in any case only liable to the extent of their respective share contribution.

To set up your KGaA, you also need the following in brief: a tax identification number (tax ID); the confirmation of registration from the Trade Licensing Office; the shareholders’ agreement aka articles of association together with notarial certification; 50,000 euros of share capital; and finally the entry in the Commercial Register under the company name you have chosen plus the legal form suffix “KGaA”.

Examples of KGaA companies:

• Merck KGaA
• MERKUR PRIVATBANK KGaA

Limited partner & general partner: A question of liability

What is a limited partner and general partner? This is a question many people ask themselves when they first hear about the special characteristics of a limited partnership. This is because, unlike all other partnerships, the partners in a limited partnership are clearly divided into general partners and limited partners. Therefore, a single individual or legal entity can never be a general partner and a general partner at the same time.

Usually, general partners are the personally liable partners of a limited partnership. In a partnership limited by shares, too, a distinction is made between general partner and limited partner, the latter being contextually referred to as limited shareholder. The general partner bears the full risk as a general partner: as with the conventional KG, he is also jointly and severally liable, directly and without limitation with business assets and private assets. The liability risk of the limited shareholders, on the other hand, is limited only to the amount of the mandatory sum that they paid in as a limited partner contribution in the form of shares when the KGaA was formed.

Financing & profit distribution

The financing of a KGaA is advantageous compared to the conventional limited partnership, as equity capital can be raised more easily. Overall, as with the AG, a share capital of 50,000 euros or more is required. With regard to the distribution of profits and loss sharing, there are no special regulations compared to the conventional KG: Either the legal principles come into play or corresponding specifications have been anchored in the articles of association. Profits are distributed in principle to 4 per cent of the capital share plus additional profit “in the appropriate relationship”. Losses are also shared appropriately.

Taxes for company & shareholder: separation principle & transparency principle

Like all other forms of corporate law, the partnership limited by shares is generally liable to pay taxes. It is considered an independent tax subject with regard to corporate income tax and trade tax; all natural persons in the partnership are usually subject to income tax.

Due to its hybrid form, however, special regulations apply to the KGaA under tax law: the taxation of the company itself is based on the separation principle, the taxation of the limited liability shareholders is also based on the separation principle and the taxation of the general partners is compulsorily based on the transparency principle. In the case of taxable turnover, the KGaA is always subject to turnover tax.

• Trade tax (GewSt)
• Value added tax (VAT)
• Income tax (ESt)
• Corporate income tax (KSt)

Taxation of the KGaA – separation principle

As a corporation and legal entity, the partnership limited by shares is generally subject to corporate income tax. Insofar as the KGaA exercises its management and/or its registered office in Germany, it is deemed to be subject to unlimited corporate income tax and must pay tax on its entire global income accordingly. In the case of foreign management and/or foreign registered office with domestic income – for example from a domestic permanent establishment – the KGaA is deemed to have limited tax liability.

The profit of a KGaA is determined by means of a comparison of business assets. For the taxable income, on the other hand, a special provision applies with regard to deductible expenses, which is anchored in the German Corporate Income Tax Act (Körperschaftsteuergesetz, KStG) – the corporate income tax of the KGaA therefore only applies where income is attributable to the share capital, i.e.: the profit shares of the limited liability shareholders. The profit shares of the general partners as well as their management remuneration are deducted in advance and can be deducted as operating expenses. They do not come into play in the calculation of the KGaA’s income, but must be taxed by the general partners themselves.

Excerpt from the law – Section 9 (1) no. 1 KStG:

in the case of partnerships limited by shares and comparable corporations, that part of the profit which is distributed to personally liable partners on their contributions not made to the share capital or as remuneration (bonus) for management;

The KGaA must pay trade tax as an entrepreneur, regardless of its hybrid structure. Thus, the determined profit from business operations – increased and decreased by the amounts specified in the Trade Tax Act (GewSt) – is understood as the trade income of the KGaA. The amounts previously calculated for corporate income tax purposes for profit shares and management remuneration of the general partners are now added back to the calculated profit from business operations, thereby ensuring that no amounts escape taxation through trade tax.

Taxation of the limited liability shareholders of the KGaA – separation principle

As natural persons, limited shareholders do not have to pay corporate income tax. Therefore, their profit shares and any management remuneration are settled via the partnership limited by shares itself. Like their counterparts in the conventional limited partnership, they are subject to income tax in the event of a dividend distribution. If they hold limited partnership shares as private assets, they generate income from capital assets in accordance with the German Income Tax Act (EStG).

Taxation of the general partners of the KGaA – separation principle

General partners are taxed like co-entrepreneurs for the purposes of tax law. In this context, they are not to be regarded as co-entrepreneurs, but merely treated as co-entrepreneurs – a small but significant difference… especially in terms of “taxes”! As natural persons, general partners are subject to income tax as normal and must pay tax on their income from business operations.

In contrast to the limited liability shareholders, general partners are required to pay corporate income tax: Their profit shares and any management remuneration are deducted from the KGaA’s income to be determined and charged directly to the general partners. The corresponding amounts must be taxed as part of the income tax return.

Partnership limited by shares (KGaA) – For whom is it worthwhile?

The possibility of easy capital procurement is certainly one of the reasons for founders of new businesses to opt for the formation of a KGaA. In addition, the partnership limited by shares has a high resistance to takeovers, which is why the individual partners can contribute personally and maintain their entrepreneurial commitment despite high capital contributions. The sometimes high liability risk of the general partner can be absorbed by the clever positioning of a GmbH or AG as a personally liable partner.

So who is the partnership limited by shares suitable for? This legal form is worthwhile for start-ups that cannot avoid external financing, but do not want to make any concessions with regard to their decision-making authority as well as the management of their company. The special legal form of the KGaA provides family businesses with a company in which control does not have to be transferred to outside hands as soon as share capital is issued as shares.

Alternatives to the KGaA: Legal forms in Germany

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

• Legal forms: List

Company types in detail:

• Sole proprietorship
• Registered businessman / registered businesswoman (e. K.)
• Civil law partnership (GbR)
• General partnership (OHG)
• Limited partnership (KG)
• Entrepreneurial company (UG)
• GmbH: Limited liability company
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Real estate stock corporation (REIT-AG)
• Societas Europaea (SE)
• Foundation / Family Foundation

GmbH & Co OHG – formation, financing, liability & Co

The general partnership – OHG for short – is one of the so-called full companies and, as a partnership, is subject to the German Commercial Code (HGB). The formation process for this legal form of company is quite uncomplicated, as it can be formed informally and requires a minimum of only two founding members. It can be formed by both natural persons and legal entities. A maximum number of permissible shareholders is not specified by law.

If the personally liable main shareholder of an OHG appears as a limited liability company (GmbH) or if no natural persons but exclusively legal entities are liable in the company as a whole, a so-called Gesellschaft mit beschränkter Haftung & Compagnie Offene Handelsgesellschaft – in short: GmbH & Co OHG – is formed. But be careful: While the GmbH represents a legal entity by virtue of its legal form, a GmbH & Co OHG does not have its own legal personality and is always considered a partnership!

Other typical partnerships:

• Limited partnership (KG)
• General partnership (OHG)
• Limited Liability Company and Company Limited Partnership(GmbH & Co KG)

Foundation & Company Name

The formation of a GmbH & Co OHG requires at least two persons, with at least one of the two appearing in the form of a GmbH. A common scenario sees both founding members as limited liability companies that join together to form a GmbH & Co OHG for a joint project. In any case, all legal entities of the company act as general partners.

If you are starting from scratch, you first need to set up a limited liability company. To do this, you need the following in a nutshell: a natural or legal person as the founder of the company; a tax identification number (tax ID); the registration confirmation from the trade office; the shareholders’ agreement aka articles of association together with notarial certification; 25,000 euros in share capital; and finally the entry in the commercial register.

You can find out how the process of setting up a GmbH works in detail here:

• Establishment of a limited liability company (GmbH)

You have successfuly founded your GmbH? Then the next step is to set up a limited liability company (Gesellschaft mit beschränkter Haftung & Compagnie Offene Handelsgesellschaft). Since the GmbH & Co OHG is a separate company, you again need a tax ID and must register the company with the trade office. Since one of the partners is a GmbH, the GmbHG also requires a minimum capital of 25,000 euros, in contrast to the conventional OHG. The establishment of articles of association is also mandatory and of course your company needs a suitable company name including the company suffix “GmbH & Co OHG”.

Management & power of representation

Insofar as no other regulation has been established in the shareholders’ agreement, each shareholder of a GmbH & Co OHG has the power of representation in the external relationship. It is possible to agree on a joint representation within the articles of association – and to enter this in the commercial register – or to withdraw the power of representation from individual shareholders. However, this restriction only applies in the internal relationship and is ineffective vis-à-vis third parties, since they cannot view the representation authority of the individual partners.

The same applies to the power to manage: In principle, all shareholders may – and should – act in a managing capacity. Deviations from the legal regulations in the German Commercial Code (HGB) are possible, but only become effective in the external relationship if a corresponding note has been entered in the commercial register and the information is thus accessible to the public. In the absence of a corresponding entry in the commercial register, a transaction is effective even if the shareholder has been excluded from management in the internal relationship.

Excerpt from the law – § 114 HGB:

(1) All shareholders are entitled and obliged to manage the business of the Company.
(2) If the management is assigned to one or more shareholders in the partnership agreement, the other shareholders shall be excluded from the management.

Business letters – offers, order forms, invoices & Co.

In business transactions, the GmbH & Co OHG is bound to a certain presentation. Thus on all business letters – as with the conventional OHG also – information must be given to the legal form addition, the company seat, the responsible register court as well as the commercial register number. Since it concerns with the partners legal entities, a GmbH & CO OHG must indicate additionally the companies of the partners together with legal form addition and further their commercial register number, the responsible register court and the registered office of the companies. The full names of all managing directors and members of the management board – as well as the first name and surname of the chairman of the supervisory board, if applicable – must also be listed on all business letters.

Business correspondence includes all written communications from a company that are specifically adressed to one or more recipients, such as order forms, solicited offers, invoices and payment reminders or dunning letters. General promotional literature and direct mail, on the other hand, are not business letters in form and accordingly do not have to contain any of the above information.

Profit distribution, loss sharing & liability

With regard to the distribution of profits and the sharing of losses, either the statutory principles come into play or corresponding provisions have been anchored in the Articles of Association. Profits are generally distributed “per capita” at 4 percent of the capital share plus additional profit. Loss sharing is also carried out “according to heads”.

A limited liability company & Compagnie General partnership is liable as a company with its business assets. In addition, the individual partners – as with the general partnership – are directly, unlimitedly and jointly and severally liable, i.e.: creditors can not only directly attack the partners independently of the causer, but in case of doubt also raise liability claims beyond the company assets, namely on the private assets of the individual partners.

If, on the other hand, shareholders of a GmbH & Co OHG appear in the form of a limited liability company (GmbH), they are liable as legal entities only to the extent of the GmbH’s capital contribution. The limitation of liability as a legal entity is one of the advantageous features of this legal form of enterprise.

Tax liability of GmbH & Co OHG shareholders – GewSt, USt & ESt / KSt

Like all other legal forms of companies, the Gesellschaft mit beschränkter Haftung & Compagnie Offene Handelsgesellschaft is generally liable to pay taxes. For commercial enterprises with an annual income of more than 24,500 euros, the trade tax obligation applies and, in principle, for all companies, the turnover tax obligation applies, insofar as the GmbH & Co OHG does not only carry out tax-exempt sales.

In addition, partnerships are generally subject to the transparency principle, which states that due to the income tax liability of the individual partners, the payment of income tax for the partnership as a whole is superfluous. Distributed profits are also taxed in the partners’ income tax return as income from business operations. However, this is based on the assumption of natural persons. Income from profits for legal entities, on the other hand, is subject to corporate income tax.

• Trade tax (GewSt)
• Value added tax (VAT)
• Income tax (ESt)
• Corporate income tax (KSt)

Taxes for businesses, all in one list:

• Taxes in Germany

GmbH & Co OHG – For whom is it worthwhile?

A significant advantage of a GmbH & Co OHG is undoubtedly the limitation of liability to the business assets of the GmbH as a personally liable partner. This means that company founders can quickly and easily get off the ground in a team on an equal footing and do not directly risk the existence of their company if an investment turns out to be disadvantageous. In contrast to the GmbH & Co KG, the equal cooperation of the partners is particularly important here and strong hierarchies corresponding to the limited partnership are avoided.

So who is the GmbH & Co OHG suitable for? This legal form is worthwhile for start-ups who would like to set up their business as a partnership without having to forego the special liability restrictions of a GmbH. A GmbH & Co OHG is also conceivable as an asset-managing company and for family businesses.

Alternatives to the GmbH & Co OHG: Legal forms in Germany

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

• Legal forms: List

Company types in detail:

• Sole proprietorship
• Registered businessman / registered businesswoman (e. K.)
• Civil law partnership (GbR)
• General partnership (OHG)
• Limited partnership (KG)
• Entrepreneurial company (UG)
• GmbH: Limited liability company
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Real estate stock corporation (REIT-AG)
• Societas Europaea (SE)
• Foundation / Family Foundation

How do I learn to act? Methods

In the past, this was virtually the only way to do it:

Trial and Error.

Trial and error means you actively participate in trading and thus learn, mostly through mistakes you make, i.e. losses. Today, you can “just copy” traders. Let’s look at the function of “social trading” and the 2 ways or methods with which you can improve your trading knowledge (besides Youtube videos, books, etc.), directly in the app.

First, the “classic method” of trial and error.

No investment advice or purchase recommendation!

All information provided here does not constitute investment advice or a recommendation to buy. All statements are my general published opinion. I have obtained the information from my experience as a private investor. This experience report cannot and is not intended to replace personal investment advice from professionals.

Trial and error: learning from mistakes

The classic way – The classic way is, “learning by doing”! You hear about methods, strategies, you read about them, you try them yourself. In the process, you usually lose a lot of money. But that’s okay, because (!) you use for trading of course only money that you have left. One of the most important rules!

Only invest money that you have “left over

This is the only way to stay calm, even if prices slip into the red.

But you can also “copy profiles”, observe traders and draw your own conclusions for your trading strategies. Passively your assets will increase, if chosen correctly.

Now before we “celebrate trading”, here’s a look at a day full of red numbers! Losses, risk, “play money”, be aware of all these factors if you want to trade. In the morning, it can look like this.

Trading app in the browser (price losses):

If you can handle it, let’s move on!

Trader copy: Modern anlagen

The modern method – Modern means in this aspect, copy the investment portfolio of a successful trader. This is exactly the advantage of eToro. Through this “copy feature” in social trading, you can easily copy investment portfolios of other traders.

After copying, the app triggers all actions exactly as the trader does. Accordingly, all financial products are bought and sold simultaneously. As a result, your assets grow and are reinvested, automatically. The big advantage is that your portfolio acts on the basis of the actions of an experienced trader. This reduces risk.

Social Trading: Copy investment portfolio and traders

Social trading is therefore, among other things, another step towards minimizing risk. Why? You do not manage your portfolio yourself and have to check the daily news, financial data, other stock values.

You do not give away your money. You just copy the portfolio and all the trader’s actions. In the eToro app you can take a close look at all movements and transactions. This way, in addition to your own learning, you can build up further practical knowledge. Simply by checking daily which movements are triggered by the experienced traders.

Before I get to the individual functions, here are my quick experiences.

My experience: The first 3 months

I was bored at Christmas and this is exactly where I tried eToro for the first time.

What I really liked was the extremely fast registration. Other trading apps often take days, banks even weeks. Here, the entire registration process was over after 10 minutes and everything was verified after 30 minutes. Accordingly, I was able to start on Christmas Eve and copied my first profiles.

Gain 24/7 trading experience instead of hiring banks

In my experience, it is a nice feeling when you can rely on an experienced person for the first time. PS: Yes, there are classic banks that take over the trade for you, but here you have no real-time insights, you get “only” monthly evaluations. In the app, you are live 24/7 if you want.

For the first time I didn’t have to check the news every morning, someone else does that. I just check the portfolio, compare the different traders with each other and optimize every 14 days. That is, I change a few traders, sometimes only assets allocated to individual traders.

This is what the app looks like (menu and watchlist):

Asset accumulation in history: comparisons

Another big advantage, which I find particularly good in this context, of course, is that you can look at the trader’s asset accumulation in the entire history.

So I can not only look at how the current investment portfolio of the respective trader looks like, I can also look at how the individual months have gone in retrospect. When did the trader achieve returns, when did he or she make losses?

Comparability – The simple and quick overview allows me to compare different traders with each other. So I can easily decide which trader or investment profile I want to copy.

Find a trader: Guidance and overview for beginners

Finding traders – Your very first step is to compare different trailers. As I just described, the overview in eToro is really strong. In the overview you can see the most popular trailers.

Filter – Through the filter function, you can go even deeper. For example, you can search for traders who have a relatively low investment risk, thus a lower return but stable and safer. You can also select traders who have a higher risk, e.g. because they invest in cryptocurrencies or because they trade with leverage. Accordingly, the profits are higher, but so are the losses – be careful!

You can also select individual countries, so that you only follow traders from your home country, for example, who may then also invest in financial products that you know.

This is how the overview of trader profiles looks like:

Trade Profile: Investment portfolio, see profits and losses

Within the overview you will then find the individual traders, with their investment portfolio and the history of their trading, that is, profits and losses in retrospect for the individual months and years. If you now open several tabs on your browser, you can easily compare the different traders and make your choice! Tip: Shortcut ” Ctrl + Tab “, or for Mac ” CMD + Tab ” to switch tabs.

Diversify investments – As always in trading financial products, the more diverse your portfolio, the less risky your investment. Accordingly, you should also divide your assets among different traders.

One trader may invest more in the American market, another more in the Asian market and yet another somewhat more speculative also with cryptocurrencies. Through the mix are the default risk of a single product.

Another advantage – Due to the fact that your single product is a trader, your investment portfolio is already broad anyway. Most traders on eToro hold between 10 and 50 financial products. Usually, of course, stocks.

This is how trading works: trader copy

Once you have copied a Trader Portfolio, the individual financial products are automatically bought / sold in the same ratio.

If you now wait a few hours or a few days, you will see that the first values are also sold again. Traders usually do not hold individual financial products for years, but they use ups and downs of the prices to generate additional profits.

So after a few days you will also see the first evaluation of the profits and losses that your trader has told. Since you automatically copy his or her investment portfolio, you have the same profits or losses that the trader has. This way your assets will increase step by step.

Reinvest – Your additional assets that were earned through profits are then reinvested as well. So you trade at some point with 105% of your capital, 110%, 120% and so on. Thus, your assets increase and you can, as described at the beginning, passively actively participate in trading.

Increase profit through asset accumulation

Profit increase through asset accumulation, simply calculated:

• Profit from 100% = 5% | 1,000 Euro = 50 Euro
• Profit from 105% = 5% | 1,050 Euro = 52.50 Euro
• Profit from 110.2% = 5% | 1,102.50 Euro = 55.13 Euro

Capital investment in copying: Overview

The maximum amount you can currently invest in a single trader is 2,000,000 US dollars, equivalent to 1,680,000 euros. You can copy a maximum of 100 profiles per eToro app account. Trades in general are opened from 1 US dollar. Therefore, the minimum amount per trader copy is 200 US dollars, i.e. 168 euros.

In summary:

• Minimum deposit / profile: $200 / €168
• Maximum amount / profile: 2.000.000 $ / 1.680.000 €
• Maximum copies: 100 profiles

Copy functions

If you want to withdraw money from your portfolio, e.g. because you want to invest it, you have several options. You can stop the portfolio of the trader immediately, so that all financial products are closed and you can, depending on stock exchange opening hours, usually within 6 to 12 hours to access your capital. On weekends, of course, it takes longer, due to the exchange opening hours.

If an individual trader still has losses in the portfolio, you also have the option to stop copying only partially.

In the app, you have these options:

• Add Funds
• Remove Funds
• Pause Copy
• Set Copy Stop Loss
• Stop Copying
• Write New Post
• View Chart

Here briefly explained all the functions in copying the trading profiles:

Add Funds / Add money

Here you add additional capital to an existing, copied profile.

Remove Funds / Withdraw Money

With this function you can deduct open amounts (not invested). Usually this is 0.5 – 10% of the invested capital.

Pause Copy / Pause copying

When you stop, all items are immediately closed (sold). If you don’t want that, choose Pause. Now no new trades will be executed. So you could hold the portfolio and sell it yourself, step by step. For example, because you first want to sell only individual items.

Set Copy Stop Loss

Here you determine how much loss you accept. The standard stop loss (SL) is 60%. That means:

• Invested: $10,000
• Depot loss: -$4,000 -> sell

If the individual deposit or copied profile falls below 6,000 US dollars, it is automatically sold. This “protects” you from even higher losses.

Stop Copying / Stop Copying

With “Stop Copying” everything is sold immediately. As described above, the sale takes time depending on which stock exchange which paper is traded on (time zones). Read more about stock exchange opening hours & time zones here.

Write New Post / New Post

Every trader has a profile and a news feed. Like on Facebook, Instagram & Co. With this function you can write new posts, which are then displayed in the trader’s news feed.

View Chart

Here you can see the entire historical course of your investment with profits / losses in a curve.

EToro: Get to know the app

Stocks, ETF, Cryptocurrency (Bitcoin), … Costs, rating + experience – where do we start? Best here! eToro app – trade stocks, ETF, cryptocurrency, in my blog you have already learned a lot about trading.

Lots of questions of course: what app do you trade with, what do I recommend? So today I want to share with you my favorite trading app, eToro. 29.88% asset growth in 12 months, with low risk through “Copy People” and “Copy Portfolios” or up to 127.35% through active trading and trading strategies.

Learn here step by step about the app, fees and much more. Of course, with all the criteria of valuation, costs and all trading options, from stocks to ETF, index fund, currency, cryptocurrency and commodities.

In addition, the ultimate eToro advantage: You can copy successful traders! Keyword “Social Trading”. In the end, you know the app inside out for your first trades. You want to start right away? Start in the browser or get the app:

• EToro