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

Der Beitrag Partnership limited by shares (KGaA) – formation, management, liability & Co erschien zuerst auf ℄ Real Estates.

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

Der Beitrag GmbH & Co KG – Foundation, Management, Liability & Co erschien zuerst auf ℄ Real Estates.

GmbH: foundation, advantages and disadvantages

In the following, you will find out everything you need to know about setting up a GmbH. How do you become a shareholder of a GmbH? What are the differences between incomplete and complete companies? What are the advantages? What are the disadvantages? How do I set up a company? What is a company? You will get an answer to all these questions and more – explained simply and quickly. Plus everything you need to know about taxes in Germany and real estate trading.

Learn everything important about it here! In addition, you will find all German types of companies and legal forms, as well as tips on how to start a company, including the special case of real estate GmbH, family foundation & Co.

If you’re considering setting up a limited company, the first thing you need to know about is the incorporation process: Who can form what exactly, when and to how many… what are the differences and similarities between the various forms of company law? It is equally important to know the advantages and disadvantages of a GmbH: From profit distribution to saving taxes – an overview of the seven most important founding criteria for you.

What are the founding criteria?

1. Number of shareholders
2. Management
3. Foundation
4. Company name
5. Funding
6. Liability
7. Profit distribution

Corporation GmbH: Management according to HGB

In the entrepreneurial world, there are many different forms of business you can choose from. They are roughly divided into two categories, namely sole proprietorship and companies, which in turn are divided into incomplete companies – these include dormant companies and BGB companies – and complete companies – partnerships, corporations and some more.

The limited liability company – in short: GmbH – is one of the so-called complete companies and, in contrast to incomplete companies, is not subject to the German Civil Code (BGB) but to the German Commercial Code (HGB). As a corporation, the GmbH has a more complex structure than other forms of corporate law, as it cannot be formed informally like a general partnership (OHG), but requires notarisation of the shareholders’ agreement.

Other typical corporations:

• Entrepreneurial company / UG (limited liability)
• Stock corporation (AG)
• European Company (Societas Europaea, abbreviated to SE)
• Partnership limited by shares (KGaA)

Legal form variant GmbH & Co KGaA – KGaA with general partner GmbH

Sometimes the GmbH also appears 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:

• AG & Co KGaA – see stock corporation (AG)
• SE & Co KGaA – see Societas Europaea (SE)

Companies operating under the legal form variant of the GmbH & Co KGaA have only existed since the end of the 1990s, after open legal questions were clearly explained by a court ruling of the Federal Supreme Court (BGF). The licensing departments of some well-known football clubs have opted to set up a GmbH & Co KGaA, as have many other companies from a wide range of industries: Food, pharmaceuticals, clothing, publishing and digital media, to name but a few.

Examples of GmbH & Co KGaA companies:

• Asklepios Clinics GmbH & Co. KGaA
• Borussia Dortmund GmbH & Co. KGaA
• CoinIX GmbH & Co. KGaA
• Funke Media Group GmbH & Co. KGaA
• H&R GmbH & Co. KGaA
• Jack Wolfskin Ausrüstung für Draußen GmbH & Co. KGaA
• Merz Pharma GmbH & Co. KGaA
• Mineralbrunnen Überkingen-Teinach GmbH & Co. KGaA
• NorCom Information Technology GmbH & Co. KGaA
• Paragon GmbH & Co. KGaA
• Schwartauer Werke GmbH & Co. KGaA
• Wiley-VCH GmbH & Co. KGaA

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 & management: alone, as a partner or in a team

You want to found a GmbH and live your dream of independence in reality? No problem! Because for the foundation of a GmbH one natural – or legal – person is completely sufficient. If you want, you can be the sole founder of the company and thus automatically take over the management alone. Founder duos, on the other hand, usually share the management, whereas in a multi-person GmbH all shareholders can exercise their co-management rights. Optionally, the position of managing director can also be outsourced and filled externally. In this case, one speaks of a commissioned external managing director.

Whoever ultimately holds the power of management… There is an obligation towards the other shareholders to provide information on the affairs of the GmbH and to submit the books and documents to them for inspection upon request.

Tip: A limited liability company is an excellent way to set up a family business. Due to the flexible possibilities to adapt the share capital and the business shares to the financial framework of all family members and to manage the business across generations, parents, children and grandchildren can jointly participate in the corporation.

Entry in the commercial register: The most important applications for GmbH founders

The internal relationship determines the beginning of the company as the date contractually agreed between the partners. In the external relationship, however, the formation of the GmbH is dated on the first action on behalf of the company, i.e. at the latest with the binding entry in the commercial register. Registration costs you on average around 200 to 300 euros and is usually carried out by a notary.

Since you are registered in the commercial register as a GmbH shareholder, you can – just like a OHG shareholder – officially trade under a company name. This means that your company has a company name, i.e. an official name, which you can freely design together with the other shareholders. It doesn’t matter whether it is a personal company, a real company, a fancy company or a mixed company… As long as the name is in the sense of the prohibition of misleading and the name is “Gesellschaft…. mbH” or carries the suffix “GmbH”, almost anything is allowed.

Tax ID, Trade Licensing Office, Articles of Association & Notary Public

You will first receive a tax identification number – tax ID for short – from your local tax office, which serves as a basic requirement for all other formalities and applications. The registration of the GmbH as a company or commercial enterprise is carried out by the Trade Licensing Office for a processing fee of approximately 10 to 65 euros.

Moreover, a so-called obligation to make additional contributions can also be agreed in the shareholders’ agreement. This is an optional limited or unlimited obligation of the partners to make further limited or unlimited additional contributions on top of the existing contributions. Such a requirement is usually linked to certain conditions or the occurrence of certain situations, such as the pending redevelopment of a property. According to the Law on Limited Liability Companies (GmbHG), such agreed additional contributions must be in proportion to the GmbH shares of the individual shareholders. However, by means of an abandonment – i.e. the relinquishment of one’s own shares in the company – it is possible to free oneself from an existing obligation to make additional contributions.

Excerpt from the law – § 26 GmbHG:

(1) The memorandum and articles of association may stipulate that the shareholders may decide to demand additional payments (additional contributions) over and above the nominal amounts of the shares.

(2) The payment of additional contributions shall be made in proportion to the shares held.

(3) The obligation to make additional contributions may be limited in the memorandum and articles of association to a certain amount to be determined in proportion to the shares held.

25,000 Euro share capital, half for cash foundation

A prerequisite for registration in the commercial register is the payment of the required share capital of at least EUR 25,000 into the business account. At least half of the specified amount must be paid into the business account when the GmbH is founded in cash. For the residual value it is irrelevant whether it is a cash contribution or a contribution in kind such as real estate, machinery, real estate liens, etc., the main thing is that the capital contribution is recognisably noted in the shareholders’ agreement according to its type.

Possible contributions in kind:

• Real Estate
• Machines
• Car
• Office & business equipment
• Copyright
• Real estate liens
• Trademark rights
• Patents
• Receivables recoverable

In general, share capital is defined as the sum of all capital contributions and is given the term “subscribed capital” in the balance sheet. The exact value is determined by the shareholders in the shareholders’ agreement and can vary for the individual shareholders. The prescribed minimum amount is set above 100 euros, whereby all higher-value contributions must be a multiple of 50. In addition, a quarter must be paid in as a minimum on each capital contribution until summa sumarum 12,500 euros is reached.

Profits, Losses & Liability

In contrast to partnerships such as the general partnership (OHG) and the limited partnership (KG), a profit made by a limited liability company is not necessarily paid out directly. Rather, the partners decide jointly how to proceed with the profit: In the case of a profit distribution, the calculation of the profit shares is carried out in proportion to the shares of the individual partners. In the case of a reserve formation, on the other hand, the profit is retained and contributes to the increase of the equity capital.

The limitation of liability is a decisive factor for the name of a GmbH and often a criterion for choosing this and no other legal form of a company. As a corporation, the GmbH is a legal entity under private law. This has the consequence that the individual partners are limited in their liability to the corporate assets and do not have to participate in the losses with their private assets in the case of corporate debts. Before registration in the commercial register, however, it is still a pre-GmbH and thus all shareholders involved in the pre-foundation are liable without limitation, directly and jointly and severally.

However, a separate liability applies to the managing director: In case of doubt, he is the only one who must also be liable with his private assets.

GmbH Bodies: Managing Director, Supervisory Board & General Meeting of Shareholders

A limited liability company consists of several organs. These bodies are divided into:

1. The directors,
2. The Supervisory Board and
3. The shareholders’ meeting.

The managing directors deal with the day-to-day business and other matters of the company and represent their company externally in accordance with the GmbHG. The supervisory board is required by law above a certain number of employees and acts as the company’s supervisory body by appointing and advising the management, but also by monitoring and, in case of doubt, dismissing it. Alternatively, its establishment can also be determined within the framework of the articles of association. The shareholders’ meeting acts as the decision-making body of the GmbH.

If you want to know more about the individual bodies of a limited company, read on here:

• Corporate bodies of a limited liability company

Advantages: Reputation, credit rating, security, flexibility & Co.

After presenting the typical characteristics of a limited liability company, you have certainly already recognised the advantages that this legal form offers you: The high start-up capital also makes the GmbH a reputable legal form, which can be an advantage especially in matters of company financing. Financial institutions are therefore often willing to issue good loans and business partners and customers gain more security due to the good credit rating.

Furthermore, contributions in kind are also accepted, so that it is not solely a matter of the cash assets of a shareholder. The financial risk, on the other hand, remains low, since the partners are not held liable with their private assets. Taxation with corporation tax is also more favourable in many cases than having to handle everything – as is the case with partnerships – via income tax.

Flexible GmbH models further allow to establish a GmbH both alone and among partners as well as in a team – the management can be arranged internally and externally for one or more persons. Shares in the GmbH can be bought and sold by both individuals and legal entities. This makes the change of shareholders much easier.

• Respected legal form
• High credit rating
• More security for banks, business partners & customers
• Contributions in kind are permissible
• Low financial risk due to limitation of liability
• More favourable taxation with corporation tax
• High flexibility in structure & management
• Legal entities are accepted as shareholders
• Simple change of shareholders

Disadvantages: Trade tax liability, 25.000 Euro share capital & liability

The disadvantages, which the establishment of a GmbH can bring with itself, are likewise fast localized: On the one hand, the high share capital of at least 25,000 euros is an obvious problem for many start-ups. Also the social adhesion measures itself accordingly to at least 25,000 euro. The foundation may not take place informally, but is subject to extensive formalities and specifications. In case of doubt, the managing director is also liable with his private assets. Banks can easily leverage the exemption from liability if, despite high creditworthiness, they aim for a directly enforceable guarantee from the shareholders. Last but not least, the GmbH is subject to trade tax and, depending on the purpose of the company and how it is handled, has to pay further taxes.

• High share capital required
• Liability based on share capital
• No informal incorporation
• Possible private liability for managing directors
• Banks may require directly enforceable guarantees
• High trade tax levies

Evaluation: Invest, Risk & Hedge

After comparing the advantages and disadvantages, it becomes clear: At first glance, the formation process seems complex and much more extensive than, for example, with a civil law partnership (GbR)… Basically, however, the process is not overly difficult, especially if it is a one-person company. A limited liability company makes particular sense if business projects are planned that are exposed to a high level of risk, or if the managing director and shareholder are one and the same person. Business founders with monetary reserves and real estate investors are given many options for structuring and managing their dreams and entrepreneurial goals through a GmbH.

Especially for families, the GmbH is often a suitable legal form, since each family member can contribute to the company according to his or her qualifications, possibilities and reliability, and changes can easily be made across generations.

GmbH models with and without shareholders

As a sole shareholder, you are your own boss: you are founder, shareholder and managing director at the same time and can set up your GmbH entirely according to your wishes. If the entrepreneurial responsibility is too high for you or if you have plans for whose implementation you are dependent on several people, you can bring in as many co-founders as you wish or add them to the GmbH later. You can also divide the management authority among one or more persons. The multi-person GmbH is therefore the most common GmbH model.

By appointing new shareholders or leaving existing shareholders, the limited company model you choose can easily change. Whether it’s a one-person company, a two-person limited liability company or even a company that operates without any shareholders at all…. In each case, there are specifics you should be aware of as they deviate from the norm of the traditional limited liability company. In the following, you will learn the most important aspects for solo founders, founding duos and team founders in order to be able to make an informed decision regarding the form of company that is best suited to you and your plans before you start your own business.

• Two-person limited liability company
• One-person limited liability company
• No-Person-GmbH

Tip: For GmbH formations with a maximum of three shareholders, a sample protocol is available that can significantly simplify the formation process for you.

Immobilien GmbH: Management, Leasing, Marketing & Co.

You think the idea of a limited liability company is not bad at all and are now wondering how you can combine your capital company with the real estate business? A real estate company is a company that serves the financing, development, realization, leasing or marketing of real estate – starting with a single property up to a real estate portfolio in the three- or multi-digit range. The management of real estate property or third-party real estate on behalf of third parties can also be handled by a real estate company.

Small tip: When acquiring and/or managing real estate, make sure that all details are clearly stated in the partnership agreement.

Vermögensverwaltende GmbH – Variant 1: Advantages of the Immobilien GmbH

This variant of the asset-managing GmbH is often referred to as a leasing company due to the advantages associated with it. It impresses with several advantages, first and foremost impressive tax advantages: Instead of having to pay tax on the rental property privately at high rates (income tax, solidarity surcharge, church tax), a corporation placed in front of the property can save taxes to a considerable extent. The rental income is counted as business income and is therefore taxed at the corporate tax rate, which significantly reduces the overall tax burden.

Furthermore, the renting and leasing of private real estate property is generally not considered a commercial activity, which would have to be regarded as taxable. The pure asset management takes place outside the general economic traffic, which is why the trade tax is completely omitted upon application to the competent tax office. In order not to risk a later taxation with the full trade tax rate, you should outsource all commercial administrative as well as manual tasks as a precaution.

Attention: In the case of a real estate GmbH, the usual distribution of profits is not provided for, as the shareholders must charge the final withholding tax on their earnings in the event of a distribution of profits. Instead, any savings resulting from the tax benefits will be used to repay debts or as an asset investment.

Asset-managing GmbH – Variant 2: Advantages of the holding company

This variant of the asset-managing GmbH is – in contrast to the Immobilien GmbH presented above – a commercial real estate company. Here, direct participations are combined in a hierarchically superior parent company – called a holding company. In addition to holdings in corporations such as the GmbH and the AG, other corporate legal forms can also be incorporated. One of the purposes of a holding company is to save taxes: By combining the various company holdings, no capital gains tax is levied in the event of a profit distribution.

Taxes for GmbH shareholders: KSt, GewSt, USt & Co.

As a GmbH shareholder, you need to know about some types of tax, because with the establishment of your company you receive income from your business and must of course also pay tax on this. In accordance with tax law, sales tax must therefore naturally be paid, insofar as the GmbH does not only carry out tax-free sales. The following applies to all corporations: They are subject to corporate income tax. An exemption from taxation is possible under certain circumstances, for example if the GmbH meets the criteria for non-profit status. The payment of trade tax is also obligatory for a GmbH, even if all founding members were freelancers, because by virtue of its legal form it is always regarded as a commercial enterprise.

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

Other taxes: LSt for employees, GrESt & GrSt

As an employer, the GmbH is of course also responsible for the payment of income tax for all persons in an employment relationship with it. Under tax law, the managing director is considered a dependent employee. When a property is purchased, a one-time land transfer tax is due. It is always demanded if the company not only rents real estate, but acquires it by purchase. For all real estate owned by the GmbH, the real estate tax is then also applied.

• Wage tax (LSt)
• Real estate transfer tax (GrESt)
• Property tax (GrSt)

You can find out what taxes you can expect with a real estate corporation here:

• Save taxes on real estate

Conclusion: Limited liability company – For whom is it worthwhile?

With versatile GmbH models you can start your dream of your own company in any constellation and have the possibility to react flexibly to changes in the number of shareholders. Whether you prefer to work alone or in a team – a GmbH offers solo founders, team founders and entrepreneurial partnerships a suitable legal form to handle even risky transactions skillfully and without private liability. The easy introduction of new shareholders and changeable management allow for a cross-generational management of the corporation and can also organize a secure succession.

In real estate terms, asset-managing real estate companies are particularly worthwhile for start-ups and investors with high private assets who wish to manage, rent out and, if necessary, sell their own and/or third-party real estate portfolios on a non-commercial (Immobilien GmbH) or commercial (Holding) basis. The GmbH is also a good choice for long-term transfers of real estate property to children and grandchildren. Furthermore, the capital contributed to the GmbH is protected even if private financial bottlenecks arise.

Comparison: Sole proprietorship, one-man GmbH, small AG or entrepreneurial company?

If you plan to set up your business on your own, you can choose between different legal forms of business: On the one hand, there is the classic sole proprietorship, in which you act as a freelancer or registered trader, or set up a small business. Alternatively, you can choose between the one-man limited liability company and the entrepreneurial company – often referred to as a “mini-GmbH” – or set up a small public limited company.

Sole proprietorship & one-person GmbH

Basically, there is not much difference between the two legal forms of a sole proprietorship and a single-member company, because in both cases you are the sole shareholder with sole power of management and sole power of representation. However, the decisive difference arises in the form of the liability issue: As a registered businessman (e. Kfm.) or registered businesswoman (e. Kff.) you are liable without limitation, directly and jointly and severally – as the sole shareholder of a one-person GmbH, on the other hand, you are liable exclusively for the business up to the amount of the capital contribution you have made.

Are you a sole proprietor yourself and no longer want to bear the enormous liability risk? Then you should think about converting your sole proprietorship into a one-person limited liability company. The change of form is easily accomplished, but can make a huge difference in case of losses! In order to avoid personal liability, as part of the registered traders (e. K.) you only need a notarial certificate confirming a value of at least 25,000 euros for your business and submit this to the commercial register together with the opening balance sheet. The sole proprietorship is practically brought into the GmbH as a contribution in kind.

Entrepreneurial company & small public limited company

Alternatively, you can consider setting up an entrepreneurial company (UG). Often referred to as a “small GmbH” or “mini-GmbH”, this legal form of company is a sub-form of the conventional limited liability company, but unlike the “normal” GmbH, it only requires a single euro as share capital. It is therefore particularly attractive for solo founders who do not have 25,500 euros in their bank account. Without the share capital of a GmbH, however, your image with the banks could be lower and your chances of getting a good loan could decrease.

The so-called “small AG” is primarily intended for individual shareholders who wish to keep their public limited company within a small group of people. Apart from the individual shareholder, who also equally assumes the role of the management board, only three other persons are required to be appointed as supervisory board members. However, the formation of a public limited company, regardless of its size, is very complex and more cost-intensive than the other common forms of corporate law. Therefore, a one-person limited liability company or an entrepreneurial company may be more suitable if you intend to found your company on your own. Alternatively, you may also consider setting up a sole proprietorship.

You can find out more about the different legal forms for solo founders here:

• Sole proprietorship (EU)
• Entrepreneurial company / UG (limited liability)
• Small public limited company – see AG

Reading tip: Legal forms & real estate GmbH

1. Legal forms: List
2. Real estate GmbH / Asset management GmbH

Legal forms: List

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)
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Real estate stock corporation (REIT-AG)
• Societas Europaea (SE)
• Foundation / Family Foundation

Real estate GmbH / Asset management GmbH

In this article you will learn the basics about real estate companies. Briefly explained: A real estate company is a company that pursues the purpose of renting, developing, financing, realizing and/or marketing. It doesn’t matter if it’s one property or multiple properties. The management of residential and commercial real estate – in its own interest or as a service offered to third parties – is also a popular focus for real estate companies and asset management GmbHs. Find out more about the main advantages and disadvantages of buying real estate and the expected costs.

• Real estate company

Der Beitrag Limited liability company (GmbH) – formation, liability, legal form, management, taxes erschien zuerst auf ℄ Real Estates.

Solar systems, Oil and Gas Heating or Heat Pump?!

When deciding on a heating system some things must be considered, because there are big differences. Depending on the property, it must be decided individually which system is best suited to heat the entire property efficiently. However, the systems differ not only in their environmental friendliness, but also in efficiency and price.

Solar Thermal: Solar Energy

Solar thermal is the process by which solar energy is converted into usable heat. In residential properties, the heat produced is usually used to heat water or for heating. Depending on the location and conditions of the property, this system can completely replace the previously used heating system.

State subsidy of 2,000 euros

Renewable Energy Reduces Running Costs

The solar cells can replace hot water by up to 50 to 65 percent and thus also cover the majority of the annual hot water demand.

How do Solar Cells Work?

The solar cells on the roof have a special function. So-called absorbers catch the heat of the sun and pass it on to pipes in which a heat transfer fluid runs. This heats up and runs to a hot water storage tank in the building, where the heat of the heat transfer fluid is transferred to the water in the storage tank via a heat exchange. The hot water from the storage tank can now be used directly in the house, both for heating and as hot water. The heat transfer fluid flows back to the solar cells to be reheated. The water in the storage tank can also be used without direct solar radiation thanks to this technology.

Solar System, Photovoltaics, where is the Difference?

In addition to a solar system a photovoltaic system is suitable. This also uses solar energy, but the energy is not converted into heat but into usable electricity. Both systems together free the owner from dependence on large energy companies, because he can now produce both heat and electricity in his own home. If the house is in a good location, the owner no longer needs to rely on externally produced heat or electricity.

Solar system (single family house):

Optimal use of space for energy generation:

Settlement and urban development, favorable energy costs for tenants:

Close-up of the roof with quantities of solar collectors to generate energy for the residents.

State Subsidies for Solar Thermal Energy

The promotion of solar thermal energy is subsidized in various areas. The first point of contact for future solar thermal energy owners should be the BAFA (Federal Office of Economics and Export Control). The conditions of funding are as follows:

1. In the area of one and two-family houses, a lump sum for the construction of a solar system of 2,000 euros can be applied for, which can be used both for hot water preparation and for heating support. This flat rate applies to solar systems up to 14 square meters. With a size of 15 to 40 square meters 140 euro per square meter are granted at gross collector surface.
2. An extension of already existing plants is subsidized with 50 Euro per square meter of gross collector area
3. Solar systems that are used exclusively for water heating can be subsidized with 50 euros per square meter of gross collector area, as long as the area is in the range of 3 to 40 square meters. The maximum subsidy per system is 500 Euro.
4. In addition, certain bonuses are offered, such as a subsidy for the replacement of defective parts or additional installations, such as a heat pump or similar.

Further Subsidies for Solar Thermal Energy

However, the promotion in the field of solar thermal energy goes even further and various banks also offer special conditions when taking out loans for the construction of solar thermal systems. Depending upon individual case it applies here however directly with the offerer to inform and individual offers obtain.

Heating Stock: High Consumption, Low Efficiency

56% find their heating system “insufficiently efficient”. My tip, rely on a humidifier before the heating system is permanently turned up to full power. This will give you the same feeling of warmth at lower costs.

Very few heating systems are efficient, and therefore also cost-saving. Here you can see the efficiency structure in the heating stock in Germany in 2018 and 2019. More than half of the respondents, a full 57% (2018) and 56% (2019), consider their heating system to be “insufficiently efficient”. A real cost eater, if used incorrectly.

• Insufficiently efficient: 56%
• Efficient: 24%
• Efficient and renewable: 20%

Gas heating: Heating with Natural Gas, Liquid Gas or Biogas

Gas heating is probably the most widespread type of heating in Germany and rightly so, because the system offers many advantages. Modern technology, efficiency and inexpensive offers characterize the gas heating. In addition, they are easy to combine with renewable energies, save space and can be easily installed during modernization and renovation.

Condensing gas heaters are currently the best on the market in terms of technology, they replace the constant boilers, which are almost non-existent, and there are also some advantages over low-temperature gas heaters. Condensing gas heaters only use the calorific value of natural gas and liquid gas or biogas and therefore use the heat of the exhaust gas. This results in a very good efficiency and standard efficiencies of well over 100% are achieved. In addition to these advantages, condensing gas heating systems do not take up more space than others and can therefore even be integrated into small niches. Learn more about the topic

• Gas heating and gas-fired boilers!

Hot water and cold water temperature in the heating system:

With all these advantages, however, it should not be forgotten that gas is also a fossil fuel and is therefore more harmful to the environment than renewable energies. However, gas is the most environmentally friendly fossil fuel, as its combustion produces few CO2 emissions and no soot. Biogas is also an alternative, as it does not emit CO2.

State funding for gas heating systems

There are also certain subsidy programs for gas heating systems, which promote both the installation of a gas heating system in a new building and the conversion to gas heating in older properties. The conditions are as follows:

1. 1. The BAFA (Federal Office of Economics and Export Control) promotes gas heating only indirectly. Real estate owners who install an eligible solar system for combined heating support and hot water preparation receive a so-called boiler exchange bonus of 500 euros if they switch to gas heating with condensing technology at the same time.

• Also banks, like the KfW promote the installation of gas heaters by granting low-interest loans to finance gas heating systems. This also includes modernizations but also ancillary costs such as those for radiators, thermal insulation and installations.
• The program number 430 “Energy-efficient renovation – investment subsidy” subsidizes various measures, such as the installation of gas heating systems or the modernization of the heating system.

Oil Heating: Heating with Fuel Oil or Bio Fuel Oil

Oil heatings are after gas heatings the probably most frequently occurring systems in Germany. The function mode is simple and works for decades in the same way. The fuel fuel oil is pumped over an oil pipe to the heating system where it is sprayed and burned. The heat generated during this process is used to warm up the heating water and thus to heat the house. Most of these components can be found in the boiler, which now takes up little more than one square meter of space and can even be hung on the wall, depending on the model.

Advantages for property owners

Oil heating systems offer many advantages for real estate owners, because oil heating has a proven and reliable technology that has proven itself for decades. Besides fuel oil can be procured with low price level and be stored on stock. A connection to gas or district heating networks is not necessary, making the owner independent of energy suppliers. The combustion is very economical and has low emissions. There is also a solution for the environmentally conscious, because bio fuel oil, which is produced from renewable raw materials, covers the requirements for the share of renewable energies and an oil heating system can also be combined well with a solar system.

In addition, disadvantages are to be led, because fuel oil prices are badly foreseeable and the fuel costs must be financed by the owner in advance. In addition, space is needed in the cellar, where the tank can be stored.

Who wants to save on fuel oil costs must also accept an oil smell in the cellar, which can only be avoided by premium fuel oil with fragrances. Who does not heat with bio fuel oil, must besides know that with the burn of oil CO2-Emissionen develops.

• Economical combustion
• Low emission

State subsidies for oil heating systems

The subsidies for oil heating systems are lower than those for other heating systems, but there are different subsidies for oil heating systems to help the owners. The conditions for the subsidies are as follows:

1. With its program 152 individual measures, the KfW Bank promotes higher energy efficiency and a reduction of energy costs. Not only the replacement of the oil heating system is therefore being promoted, but also the installation of a highly efficient circulation pump and a circulation pump.
2. The BAFA (Federal Office of Economics and Export Control) promotes oil heating systems only indirectly, as well as gas heating systems. Real estate owners who install an eligible solar system for combined heating support and hot water preparation receive a so-called boiler exchange bonus of 500 euros when replacing the old heating system with an oil heating system with condensing technology.

Pellet Heating: Ovens with Pressed Wood Residues

A modern pellet heating system is known for low fuel costs as well as for environmentally friendly heating and is therefore one step ahead of conventional gas and oil heating systems. Also the function mode is relatively simple. The wood pellets are periodically delivered to the combustion chamber by means of a feeder, so the correct filling is fully automatic. The heat generated by burning the pellets is used in a separate boiler to heat the water. Thus, both the heating can be operated and the hot water can be produced.

The costs for the fuels of a pellet heating system are much cheaper than fossil fuels, such as oil or gas, but the purchase costs for pellet heating systems are much higher and also maintenance work costs more. In addition, this heating system requires considerably more space than a gas or oil heating system. On the other hand, the pellet heating system is very environmentally friendly.

Wood pellets: size and units

• Diameter: 6 – 9 mm
• Length 10 – 35 mm
• Raw density 1.1 kg/dm³ 1.2 kg/dm³
• Bulk density approx. 650 kg/m³ (0.65 kg/l) approx. 650 kg/m³

Close-up of wood pellets:

State subsidies for pellet heating systems

The funding for pellet heating systems is extraordinarily good. Again, there are different possibilities, which have different requirements. The conditions are as follows:

1. 1. The KfW Bank also promotes here with low-interest loans
   2. The BAFA (Federal Office of Economics and Export Control) wants to make the installation of a pellet heating system as attractive as possible with their subsidy, therefore they offer financial means of the market incentive program (MAP), which do not have to be paid back! However, these unbelievable conditions require strict conditions to make the subsidy possible. These conditions only include pellet boilers with and without buffer storage and pellet stoves with water pocket and combination stoves that can be filled with wood pellets, logs or wood chips.

Heat Pump: Heating with the Heat of Nature

Technically speaking, a heat pump is a system that can extract thermal energy from a medium with low temperatures through technical work and supplied working energy. That sounds first once quite complicated, the principle of the heat pump is however actually quite simple. The heat pump extracts heat from the different energy sources air, earth and water and uses it to heat water for heating purposes. For this purpose external electricity must be supplied, but not as much as would be necessary for a normal heating system.

Heat pumps also have many financial advantages, because the state subsidies are very high here. Banks also offer favourable credit conditions for households with heat pumps. The value increasing function, which a heat pump for a real estate represents, is additionally a plus for the owner. Heat pumps are besides extremely pollution free. They emit neither CO2-Emissionen, nor use them fossil fuels. The lastingness is probably one of the largest advantages for heat pumps, which arrive not only with owners of real estate well, but also by the state are increasingly supported.

State funding for a heat pump

The subsidies for heat pumps are regulated by the BAFA. Banks also offer favorable interest rates for financing heat pumps, but the large subsidies come from the state. Efficient heat pumps with a nominal heat output of up to 100 kilowatts are subsidized if they perform the following tasks:

1. Combination of space heating and hot water (only space heating if hot water is produced by other renewable energies)
2. Exclusively for space heating in non-residential buildings
3. To provide process heat and heat for the heating network
4. Funding guidelines must be fulfilled

Excluded from state subsidies are air-to-air heat pumps and other heat pumps that transfer their heat directly to the air. Heat pumps that produce only hot water are also not subsidized.

BHKW – Heat and produce electricity at the same time

Combined heat and power plants or CHPs for short are known for using energy particularly efficiently. The system is quite simple, because a CHP produces not only thermal energy, i.e. heat, but also electrical energy, i.e. electricity, and that at the same time. Ecologically, the parallel generation of electricity and heat is extremely useful because it results in fewer losses.

The mode of operation is extremely effective, because the CHP works with the principle of combined heat and power generation. During the production of electricity, heat is generated which is normally not used as waste heat and is therefore lost. However, if this heat is used, one speaks of a cogeneration plant. These CHP plants are particularly suitable for large industrial plants, hospitals or universities, as the heat used can be fed into district heating networks or used for production in industrial plants. This model combines the motor, the generator and the heat exchanger in a sound-insulated housing and thus compactly packs all required modules in one block. This is where the name block-type thermal power station comes from.

A CHP can be operated by almost all drives and gets along with almost any fuel. From gasoline and diesel engines, steam or Stirling engines to gas turbines or fuel cells, the CHP can use almost any drive. The fuels are then selected according to the drive system. Thus, a CHP can be very environmentally friendly and can be operated with biogas or regenerative energies, for example, but it can also function just as environmentally harmful with crude oil. The possibilities are therefore broadly diversified and can be individually adapted to the customer’s wishes.

Promotion for BHKW

The subsidies for CHP plants are precisely regulated. The owner of such a plant can feed the electricity into the public grid, similar to photovoltaic systems, and receive compensation for this. The conditions for BAFA-supported CHP plants are as follows:

• The “Law for the Maintenance, Modernization and Expansion of Combined Heat and Power Generation” regulates that operators of a CHP plant receive a supplement for the electricity produced. However, in order to do so, the CHP unit must be approved by the BAFA
• The KfW Bank also subsidizes a CHP with favorable interest rates and good credit conditions

Infrared: Heating with Electricity

Even if the conventional heating systems have proven themselves, infrared heating is definitely an alternative that should be considered. Although heating with electricity is generally considered expensive, there are other factors that make heating with electricity economical. Our detailed guide will tell you which points are important and when heating with electricity is worthwhile.

Heating with electricity by infrared rays

When building a house, the question of the right heating system always arises. There are many variants that need to be considered, and infrared heating is one of them. The model shows many advantages that are well adapted to different life situations. But under which conditions is it worthwhile to install infrared heating and how exactly does heating with electricity actually work?

Acceptable and healthy heat through infrared rays

The radiation of infrared heating works differently than other heating systems, because the radiation does not heat the air in the room, but directly the body. This includes not only the human body, but also walls, ceilings or floors and even furniture. The principle can be compared with sunbathing in winter. With this technique, the body feels the warmth as pleasant even at low temperatures. From this follows that only low temperatures are necessary and thus electricity and heating costs are saved. Another advantage of infrared heating is that the rooms do not have to be preheated for a long time to keep the body pleasantly warm. This provides comfortable warmth and thus increases well-being and health.

Heating Technology: Circulation Pump, Combined Heat and Power & Condensing Technology

Owners of buildings or real estate meet with searches for heating systems again and again the same technical terms. So what is really behind terms such as combined heat and power or condensing boiler technology and how important are these for the new heating system?

Heating pump – the heart of central heating

Probably the most important element of a common central heating system is the heating pump, also called circulation pump. It works in the basement and ensures that there is always enough warm water to the radiators, thus enabling heating. However, the willingness to perform, especially in older models, results in unnecessarily high energy consumption and the resulting high energy costs. Therefore, it makes sense to replace older models, as they are usually oversized and always provide high performance, even when this is not necessary. The older models do not adapt to the actual demand and therefore often work unnecessarily at full speed even in summer. New models have a stepwise or automatic regulation and therefore only work at full power when it is really needed. This reduces costs enormously and energy consumption is not unnecessarily high.

Heating pump to be replaced: drain

But when is it necessary to replace a heating pump? This is easy to find out by following these tips:

• Calculate how many watts you use and compare this value with the power value of your existing pump. Calculate about 1-2 Watt per radiator. A household with 10 radiators therefore needs a heat pump with the power of about 20 watts. If the achievement value of your heat pump lies clearly over the value, you should think about an investment into a new heat pump.
• Check the energy class of your heat pump. The higher the energy class, the lower the power consumption and the higher the energy saving potential. A class A heat pump is optimal, as it works most efficiently.
• Look for a specialized company and get individual advice on whether the installation of a new heating pump makes sense for your real estate.

Cogeneration: Efficient use of energy

In general, the term cogeneration is used to describe the generation of energy, i.e. electricity by combustion, whereby the waste heat is used for heating purposes. The kinetic energy generated to drive a generator is used to generate electricity. The available waste heat is then supplied to heating systems. This waste heat is so great in large plants, such as industrial plants, that entire districts but also public buildings, such as hospitals, can be supplied with it. The parallel generation of electrical and thermal energy makes enormous economic sense, as otherwise much energy remains unused.

The technology has been minimized enormously over the last years. Where large machines were needed in the past, there are now CHP plants that are compactly combined in a box and produce the same output. Meanwhile, there are also systems for multi-family houses, which can generate outputs of about 4kW of electrical and 20kW of thermal energy and are relatively small. The technology is thus becoming increasingly compatible and individually applicable in many different areas.

Condensing technology: utilization of condensation heat

Condensing technology uses the temperatures of the exhaust gas to preheat the combustion air. A pipe-in-pipe flue gas system heats the cold outside air through the flue gas. The exhaust gas then cools down to the outside temperature. The flue gas must pass a very large heat transfer surface and in doing so releases the heat to the lowest possible system temperatures of the heating system. Since these are very low, the water content in the exhaust gas condenses and the condensation heat is used. Condensing technology therefore mainly describes the process by which the heat of condensation is used.

In order for the condensation to function under all conditions, low heating system temperatures are necessary, which are created by large heat transfer surfaces. Panel heating systems such as floor, ceiling and wall heating systems are therefore particularly popular.

Radiators: Models, Functions & Correct Ventilation

Radiators ensure that the heat produced can reach the various rooms in the building and be controlled there. There are not only different models of radiators, but also some things you should know about them.

Floor Heating: cuddly warm feet

The underfloor heating is one of the panel heating systems. A distinction is made between warm water heating systems (wet and dry systems) and electrical systems. Hot water underfloor heating systems are installed invisibly in the floor surface. The pipes are therefore laid directly in or under the screed. Electric underfloor heating consists of a mat or net in which heating cables are integrated. This is laid under the floor covering and heats the floor from there.

In terms of price, the cost of underfloor heating varies depending on the system. In the case of a dry system, the cost is 28-44 euros per square meter. Additional costs for other materials and installation are also included. A wet system costs between 13-40 euros per square meter, depending on the type of installation. Here, too, there are additional costs for additional installation materials. The electrical systems can be installed from 24 euros per square meter. The prices vary depending on the floor area. The larger the surface, i.e. the surface, the lower the price per square meter.

Wall & ceiling heating: invisible radiators

The wall and ceiling heating systems are also among the panel heating systems. They are installed under the wall or ceiling and initially only heat the wall/ceiling. The heat is then transferred to the room by thermal radiation. Heat dissipation by convection is almost non-existent here and the movement of the air is largely eliminated.

In most cases, a simple central heating system is the source of the heat, because it pumps the warm water through the pipes under the wall/ceiling. However, this heating system can also be combined with renewable energies and condensing boilers. The panel heating system manages here without any problems with supply temperatures of around 30° C. A prerequisite for the efficient use of this radiator, however, is good insulation, as otherwise too much thermal energy is lost.

Simply vent the radiator: drain

Each heater should be vented regularly. This helps to avoid annoying noises and allows the heater to develop its full performance. Trapped air in the heater reduces the performance of the heater and leads to higher energy consumption. This air must therefore be vented regularly. Signs that the heater needs to be vented are for example strange noises like a bubbling or a gurgling sound coming from the radiator but also that the heater does not get completely warm but only around the region of the water inlet.

Before the heater is vented, the water pressure must be checked. This should be within the marked normal range, otherwise water must be topped up to restore the pressure. After each new filling of the heater with water, the heater must be vented. For this purpose all thermostats should be closed and the valve should be searched for. This is usually located at the opposite upper end of the radiator and looks either like a small square pin or a pentagonal screw. Depending on which valve is present, venting must be done with a venting wrench or pliers.

The most common valve is the square spindle, which can be vented with a vent wrench. To do this, the valve must be opened until the air escapes hissing. It is important not to open the valve too far, otherwise it could fall out. If all excess air has escaped, water will start to escape from the valve. From this moment the valve should be closed again quickly. It is best to catch escaping water with a container.

Fireplace and Stove: Heating with Comfort

Also a chimney oven offers the possibility to save heating costs or even to heat the whole building. A fire-place with wood or pellets to heat, brings however by far more advantages than only the saving of heating costs. The burning of wood is CO2-neutral and thus very pollution free. Whether the choice falls now on a chimney oven or on a tiled stove, is here rather a matter of taste.

Fire-place in modern free-hold apartment (Berlin):

Fireplace integration country house (Mallorca)

An ordinary wood-burning stove consists of a steel body with a combustion chamber and a correspondingly required flue gas pipe. The flue gas pipe directs the flue gas products produced during combustion to the outside. The firebox is closed with a fireproof glass door to minimize the danger of an open fire in the living room. Fireplace stoves are offered in many different designs and models and can be individually adapted to the room by the owner. Besides the practical function of saving heating costs, the fireplace also has a cosy and aesthetic effect.

Firewood: Do-it-yourself, shredding & stacking

Kaminholz & Kaminholzlagerung – Larger quantities of firewood, are often stored on properties. The garden or a barn are often used for storage. Larger quantities of firewood, once stored on a property, must be stored in a fire protected place. This measure is regularly checked by a chimney sweep. In this article you will find tips and videos about storage, DIY, stacking and chopping firewood for your fireplace:

Der Beitrag Heating: Solar, Oil, Gas, Heat Pump, Pellets – Comparison, Costs & State Subsidies erschien zuerst auf ℄ Real Estates.