Discreet, anonymous selling: shopping mall

You are probably looking for a reputable office or a real estate agent that will put your shopping center on the market discreetly and anonymously.

Do you want everyone to know about the sale and your asset growth?

Selling anonymously means selling off market, with a specialist estate agency.

This means that in the off market you specifically address private investors and buyers, well-known families, their family offices, real estate funds in Germany and abroad. Depending on the group of buyers or the specific buyer for whom the special offer is most interesting.

In the very first step, only one person learns about the sale. The majority of properties are sold immediately, discreetly and anonymously, without any other person or institution knowing about it. The basis for this is of course always a solid valuation.

Creditworthiness, financial proof, purchase offer, all this is often available within 14 to 30 days.

Thus, we act as a real estate agency quite differently than the classic real estate agent, through which otherwise typical condominiums, townhouses and single-family homes are sold.

With us, marketing does not go broad, but extremely specific to individuals who are known from the personal network.

This extremely accelerates the sale of real estate. Especially due to the shortage of supply. This exclusivity also allows new leeway in negotiations.

Location, location, location: A, B or C

Location is what counts when selling real estate. Of course, this also applies to shopping centres. Therefore, a property valuation is not as simple and typical as it would be for a house or apartment building.

Other factors also play a role in the sale of shopping malls. For example, a central and important value factor for the property is the development and forecast for the location, in micro-location and macro-location. What opportunities does the location offer as it is and if it is further developed?

Initial Value Factors:

• Location, substance, figures and letting
• Development / forecast for microlocation
• Development / forecast for macro location

Tip. Value factor underground parking.

Underground, above ground, there are a few factors to consider besides the property and the substance.

Accordingly, the asking price is not calculated as usual from the factors: location, size and layout. Forecasts for the future are also a value factor for shopping centres. Of course, as well as the current tenant situation, existing contracts and so on.

Accordingly, the sale is more complex in the whole subject.

Selling real estate: 1×1 for sellers

For all those selling your first property, for example through an impromptu inheritance, here’s another article that summarizes selling real estate in simple steps.

Procedure, controls and errors…

How does a real estate sale typically go? If you own a shopping center, you’re usually familiar with trading real estate. But sometimes it comes unexpectedly, as through a real estate inheritance.

Not everyone anticipates the death of a loved one in advance, sometimes even an unknown person. If there is no direct descendant, many choose the children of siblings, or closer relatives.

Real estate sale in detail

First-time sellers have many, basic questions:

• What is the process for selling real estate?
• What do you start with, what do you need?
• How long does it take?
• Who is the right contact person?

For all these questions and of course much more, e.g. mistakes when selling real estate but also the taxes that come to you as a seller, we have answers here. Read our big guide on the subject:

• Real estate sale: procedure, taxes and mistakes

Sell commercial property

This little guide is a bit more advanced. Here you will learn a few more basics about commercial real estate and of course various aspects of the sale.

• Sell commercial property

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

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

The limited partnership – in short: Kommandite or KG – is one of the so-called complete 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 all general partners of a KG consist of limited liability companies (GmbH), they form a so-called Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft – called GmbH & Co KG for short. Such a GmbH is sometimes also referred to as a general partner GmbH, but beware: the general partner GmbH is a corporation and part of the GmbH & Co KG, while the GmbH & Co KG by virtue of its legal form is always a partnership!

Other typical partnerships:

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

Foundation & Company Name

Two persons are required for the formation of a GmbH & Co KG: The GmbH as full partner – i.e. general partner – and a natural person as partial partner – called limited partner. If you are starting from scratch, you must first establish a limited liability company in preparation. To do this, you need the following in a nutshell: a natural person or legal entity as the founder of the company; a tax identification number (tax ID); the confirmation of registration 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? The limited partner is ready to go? Then the next step is to set up a limited liability company (Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft). Since the GmbH & Co KG is a separate company, you again need a tax ID and must register the company with the trade office. 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 KG”.

Management & power of representation

As a general partner, the GmbH basically has power of representation in the external relationship. However, since a GmbH is a legal entity, the management authority is entrusted to a natural person. This may be a shareholder of the general partner GmbH or the position may be assigned externally to a so-called third-party managing director. In this case, there is often talk of a third party board of directors or external board of directors.

Alternatively, limited partners may also act as managing directors, provided they are expressly appointed to this body. Since limited partners are generally excluded from management, their management authority in this case is, however, limited to the right of objection in the case of extraordinary transactions.

Profit distribution & loss sharing

With regard to the distribution of profits and the sharing of losses, either the statutory principles come into play or corresponding specifications have been anchored in the articles of association. Profits are generally distributed at 4 percent of the capital share plus additional profit “in reasonable proportion”. Losses are also shared appropriately.

It is possible to completely exclude the general partner GmbH from the distribution of profits by means of a declaration in the shareholders’ agreement, whereby higher profits can be distributed to the investors. Insofar as the GmbH has inherent management authority, it can be paid an appropriate remuneration to compensate for its role as managing director, whereby a managing director’s remuneration cannot be deducted in total as a business expense for tax purposes. However, the remuneration is paid irrespective of the profits generated and thereby has the effect, if applicable, that the entire company can save taxes.

General partner, partial partner & tax liability

Usually, the general partners of a limited partnership are liable without limitation and jointly and severally – i.e. with their business assets plus private assets. If, on the other hand, the general partner of a KG appears in the form of a limited liability company (GmbH), he is liable as a legal entity only to the extent of the GmbH’s capital contribution. Limited partners are liable – as in the case of a conventional KG – only to the extent of the mandatory sum that they paid in as a limited partner’s contribution when the GmbH & Co KG was founded.

Like all other legal forms of companies, the Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft is generally liable to pay taxes. First and foremost, they are subject to trade tax and – in the case of taxable turnover – turnover tax. A GmbH & Co KG is generally exempt from income tax and corporation tax… However, profit income is still subject to taxation: corporation tax is applied to the profit share of the general partner GmbH, whereas limited partners must pay income tax on their profit.

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

Tip. All taxes for companies in one list:

• Taxes in Germany

GmbH & Co KG – For whom is it worthwhile?

A significant advantage of a GmbH & Co KG is undoubtedly the limitation of liability to the business assets of the general partner GmbH. This means that founders do not directly risk the existence of their company if an investment turns out to be disadvantageous, and they can quickly increase their equity capital through the flexible and simple admission of new limited partners. They can confidently outsource the organisational effort and the management to an outside body or make deviating succession arrangements in order to maintain the GmbH & Co KG.

So who is the GmbH & Co KG 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 KG is also conceivable as an asset-managing company and for family businesses.

Alternatives to the GmbH & Co KG: 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