Villas & high-rises: Living on the Main, Annastrasse & Co.

With a population of about 750,000 and an area of almost 750 square kilometers, Frankfurt am Main is one of the important German metropolises. As one of the most imposing German cities, the Hessian metropolis of Frankfurt is in no way inferior to the other cities of Berlin, Hamburg and Munich. The standard of living is high and the economy stable. While students appreciate the colorful nightlife, the strong banking and financial sector attracts mainly entrepreneurs and investors here. Thus, not only apartments in the city center are popular here, but also villas and single-family homes on the outskirts of the city. Those who want to buy an apartment or a house have to dig deep into their pockets.

List: The most expensive places & streets

Before we take a closer look at the individual streets in Frankfurt am Main, we will now give you an overview of the most expensive streets in the Main metropolis. The purchase price per square metre is between €10,000 and €14,000.

• Anna Street
• Siesmayerstrasse
• Holzhausenstraße
• Deutschherrnufer

Anna Street

Annastrasse is one of the most expensive streets in Frankfurt am Main. At around €11,000/sqm, it is among the top 20 streets in Germany. The popular street is located in the Nordend-West district of the Hessian city. Located directly at the Holzhausenpark, one villa is more beautiful than the other. With just 25 house numbers, the street impresses with a quiet yet central location.

The price per square meter here is 11.000€ /sqm

Maximum price up to 11.000€/ sqm

Here you will find top adresses like:

• Adolph von Holzhausen Park
• Golf club (nearby)

Map and location of Annastrasse (Frankfurt am Main)

See for yourself and explore the Annastrasse in a virtual way.

Streetview Annastraße

Siesmayerstrasse

Siesmayerstraße is located in the popular Westend district of Hamburg. The palm garden of the city of Frankfurt am Main stretches almost the entire length of the street. The botanical garden includes a blooming nature, a tropicarium, the palm house, a medicinal plant house and numerous leisure and play facilities for children. This makes the Siesmayerstraße particularly suitable for families.

The price per square meter here is 10.000 Euro€ /sqm

Maximum price up to 10.000 Euro€/ sqm

Here you will find top adresses like:

• Palm Garden
• Tropicarium
• Botanical gardens

Map and location of Siesmayerstraße (Frankfurt am Main)

See for yourself and explore the Siesmayerstrasse in a virtual way.

Streetview Siesmayer Street:

Holzhausenstraße

Holzhausenstraße is located in the Nordend district and is considered one of the top adresses when it comes to beautiful living in Frankfurt. Here you will find numerous listed buildings and large villas.

The price per square meter here is 12.500€ /sqm

Maximum price up to 12.500€/ sqm

Map and location of Holzhausenstraße (Frankfurt am Main)

See for yourself and explore the Holzhausenstrasse in a virtual way.

Streetview Holzhausenstraße (Frankfurt am Main)

Deutschherrnufer

Deutschherrnufer is located in Frankfurt’s Sachsenhausen-Nord district. Situated directly on the southern bank of the Main, it is a popular and above all modern residential location with a great view for which a lot of money is paid.

The price per square meter here is 13.850€ /sqm

Maximum price up to 13.850€/ sqm

Here you will find top adresses like:

• Main Plaza: Hotel and Apartments
• European Central Bank
• Frankfurter Rundschau

Map and location of Deutschlandherrnufer (Frankfurt am Main)

Get a picture for yourself and explore the Deutschlandherrnufer in a virtual way.

Streetview Deutschlandherrnufer:

Frankfurt am Main: Real estate in the financial metropolis

Frankfurt is definitely the most impressive German city. If you stand in the Frankfurt city center, you drive in here, the skyscrapers are something very impressive. This makes the city seem twice as big as Berlin, three times as big as Munich and four times as big as Cologne. The attractive location directly on the Main and in the centre of Central Europe continues to attract people from all over Germany and the world to the city. Frankfurt a.M. is known for its unique skyline, skyscrapers and a thriving financial market. But the city offers so much more. Museums, green spaces, the opera, art halls. Culture as far as the eye can see.

Real estate in Frankfurt

With its opera, theatres and museum mile, Frankfurt has everything that high culture needs. In addition, a decent gastronomy scene, which in terms of internationality has no comparison in the world. There are beautiful parks in the city, as well as the zoo and the Palmengarten, so that you don’t have to leave the city for a short rest. The banks of the Main River invite you to stroll along, in addition to the chic shopping galeries. The skyscrapers are also an attraction in themselves. And if you visit one of the numerous festivals in the summer, it’s hard to get away from the view of the skyline.

• Real Estate Frankfurt

Living in Frankfurt am Main: Popular districts & residential areas

With a population of less than one million, the metropolis in the Rhine-Main region is known worldwide and is home to Germany’s second largest airport. No wonder, after all, Frankfurt is considered an attractive place to live. While the up-and-coming Gallus convinces with its hip flair and excellent location, the Westend and Nordend inspire with their elegant charm paired with historical flair. Find out everything about Frankfurt’s most popular districts, their location and prices per square metre here.

• Living in Frankfurt am Main

Sell, buy and live in Frankfurt am Main

Whether modern Nordend, up-and-coming Gallus, international Westend or the popular neighbouring town of Offenbach, with the current price trend it is worth selling your property in Frankfurt! You want to sell your apartment, your apartment building or your land in Frankfurt? Find out here what you need to bear in mind when selling your property in Frankfurt. In addition: Our free guides and tips on the topics of property valuation, off market and all prices per square metre in Frankfurt – Welcome to Frankfurt!

• Selling real estate in Frankfurt

Buy real estate in the most exclusive streets

From Harvestehuder Weg in Hamburg to Annastrasse in the north-west of Frankfurt and Tegernsee in the south of Munich – the German real estate landscape is quite respectable by international standards. And not only that: Anyone who thinks that the most expensive streets in Germany are only to be found on the mainland is mistaken. Nowhere in Germany are properties as sought-after and exclusive as in Sylt. More about how much a square metre costs here in a moment. Here are the most expensive streets in Germany at a glance.

Berlin: Kurfürstendamm, Tiergarten & Co.

Berlin is not only the capital of Germany, but also an attractive location for international companies, a stronghold of German culture and a popular place to live for couples, singles and students. The capital of Germany is a breathtaking city in every respect. No wonder, after all, almost 4 million people call it home. Thus, the metropolis inspires with its lively and diverse cityscape, its high historical value, its turbulent nightlife and its stable economy. While Kurfürstendamm is one of the most luxurious shopping streets in Europe, the area in and around Berlin-Mitte, Tiergarten and Charlottenburg are home to the city’s most exclusive properties.

• Most expensive streets in Berlin

The most expensive streets in Berlin include:

• At the circus, Werderscher Markt
• Breitscheidplatz
• Gendarmenmarkt
• Island Road
• Klopstockstraße
• Kurfürstendamm
• Paris Square
• Savignyplatz

The most expensive street in Berlin is Inselstraße.

Inselstraße in Berlin

The Inselstraße in Berlin-Mitte inspires with its exclusive location. The banks of the Spree River are within walking distance, the city’s most important monuments and sights are only a subway ride away, and for those who need a break from the colorful hustle and bustle of the city, the many green spaces and parks offer a relaxing change of scenery. Property prices here are around 23,000 euros per square metre.

Up to 23,000 euros per m²

Read more about here:

• Most expensive streets in Berlin

Düsseldorf

The capital of North Rhine-Westphalia inspires with its luxurious quarters, exclusive villa districts and its breathtaking skyline. The comprehensive good infrastructure, the diverse shopping facilities and the internationally positioned local economy also make Düsseldorf a superlative city. Düsseldorf’s attractiveness is also reflected in the local real estate market: especially the streets in the Old Town and Oberkassel are among the most exclusive residential areas.

• The most expensive streets in Düsseldorf

Here are the most expensive streets in Düsseldorf:

• Old Town
• Kaiser-Wilhelm-Ring, Kaiser-Friedrich-Ring

The most expensive street in Düsseldorf is the Altestadt.

Old town in Düsseldorf

The Altestadt in Düsseldorf is not only the most expensive street in the entire city, but also the most beautiful. The banks of the Rhine can be reached on foot, the historic Burgenplatz is only a few minutes away by car and Düsseldorf’s city hall is also at home here. One of the most famous shopping streets in Europe is also nearby: Königsallee. Property prices here are around €13,500 per square metre.

Up to 13,400 euros per m²

Read more about here:

• The most expensive streets in Düsseldorf

Frankfurt am Main

With a population of about 750,000 and an area of almost 750 square kilometers, Frankfurt am Main is one of the important German metropolises. As one of the most imposing German cities, the Hessian metropolis of Frankfurt is in no way inferior to the other cities of Berlin, Hamburg and Munich. The standard of living is high and the economy stable. While students appreciate the colorful nightlife, the strong banking and financial sector attracts mainly entrepreneurs and investors here. Thus, not only apartments in the city centre are popular here, but also villas and detached houses on the outskirts of the city.

• Most expensive streets in Frankfurt

Here are the most expensive streets in Frankfurt am Main:

• Anna Street
• Siesmayerstrasse

The most expensive street in Frankfurt is Annastrasse in the north-west of the city.

Annastrasse in Frankfurt

Properties in Frankfurt’s North End are particularly sought-after. Not only is Siesmayerstrasse located here, but also the most expensive street in the entire metropolis: Annastrasse. Here, property prices are around 11,000 euros per square metre.

Read more about here:

• Most expensive streets in Frankfurt

Hamburg

Strong economy, sea air, international orientation – all this makes Hamburg in the north of Germany. Hamburg has its very own charm, shaped by its unique history, maritime shipping and the many international residents from all corners of Europe. It is not only home to families, students and entrepreneurs, but also to famous faces from the worlds of film, television, music and sport. This, of course, makes the Hanseatic city’s real estate market particularly attractive. So anyone who owns a property in Hamburg can consider themselves very lucky.

• The most expensive streets in Hamburg

See some of the most expensive streets in Hamburg:

• By the quay
• Bellevue
• Elbchaussee
• Great Elbe Strait
• Harvestehude road
• Midway
• Beautiful view
• Strandkai

The most expensive street in Hamburg is Harvestehuder Weg.

Harvestehuder Weg in Hamburg

Enclosed by the Aussen-Alster and the Isebekanal, the Harvestehude district is located in the Eimsbüttel district. Harvestehuder Weg is also located here. Property prices here are around €16,000 per square metre.

Read more about here:

• The most expensive streets in Hamburg

Munich

The Bavarian capital impresses with its beautiful architecture, a wide range of cultural activities and a high standard of living. As a historic art and cultural metropolis, Munich fascinates families, couples, students and young professionals. Entrepreneurs and investors are also attracted by the proximity to the Alps, the multitude of breathtaking lakes and the proximity to the Italian coast in the south. As Germany’s third largest city, Munich also stands out for its very low unemployment rate, as well as its strong technology and science sector. No wonder that hardly any other city in Germany is as expensive as Munich. Whether you are looking for a spacious villa in Maxvorstadt, a renovated apartment in Glockenbachviertel or a modernised detached house in Bogenhausen – here you will find the most luxurious properties in Germany.

So the list of Munich’s most expensive streets is long. See for yourself here:

• Elizabeth Square
• Fleming Street
• Klenzestraße
• Queen Street
• Lake Road
• Mandlstrasse
• Maria-Theresia-Straße
• Müllerstrasse
• Schellingstraße
• Sophienstraße
• Stone Street
• Zuccali Street (North)
• Driveway (south)
• Titian Street
• Montenstrasse
• Bäumlstraße

Among the most expensive streets in Munich are Königinstraße, Seestraße and Mandlstraße in Schwabing.

Queen Street in Munich

The former art and cultural district of Schwabing is home to Königsstraße. The properties here are among the most exclusive in Germany. Property prices here are around 20,000 euros per square metre.

Norderney

Norderney is one of the East Frisian islands in the North Sea. Only seven of the 12 islands are inhabited. With its almost 7,000 inhabitants, Norderney is the most densely populated island of all and delights with its unspoilt nature, picturesque beaches and multitude of sights and monuments.

• The most expensive streets on Norderney

Here are the most expensive streets in Norderney:

• On the west beach
• Kaiserstrasse
• Knyphausenstraße

The most expensive street in Norderney is the street Am Weststrand in the west of the island.

On the west beach in Norderney

The street Am Weststrand in Norderney convinces with its proximity to the beach. Several bars, restaurants, playgrounds and green spaces are also located here. Whether it’s an exclusive holiday apartment with a view of the sea or a permanent residence away from the mainland – everyone feels at home here. So if you want to buy a plot of land on Am Weststrand, you have to reckon with 11,200 euros per square metre.

Read more about here:

• The most expensive streets on Norderney

Lake Starnberg

Lake Starnberg is located just under 40 km from the centre of Munich and is thus midway between the Bavarian capital and the popular residential and holiday resort of Tegernsee. Grünwald is also not far away by car. Cultural richness, untouched nature and the quiet and relaxed atmosphere make the communities around the lake a popular place to live. German celebrities in particular appreciate this. So be prepared to run into one or the other famous face here.

• The most expensive streets at Lake Starnberg

Here are the most expensive streets at the Starnberger See:

• Front lake road
• Celtic Road
• Lakeside Road
• South lake road

The most expensive street on Lake Starnberg is Südliche Seestraße in Münsing.

Southern lakeside road at Lake Starnberg

While the north of Lake Starnberg convinces with its small town feeling and the community of Seeshaupt in the south with its family atmosphere, the east of Starnberg is considered a former residence of German nobility. And it is precisely here that the most expensive street in all of Bavaria is located, with its breathtaking view over the entire lake. Property prices in the southern lakeside street are around 25,000 euros per square metre.

Read more about here:

• The most expensive streets at Lake Starnberg

Sylt

Sylt is and remains an island of superlatives. And there in many respects. The proximity to the North Sea and the unspoiled nature makes the clocks tick differently here. While a large number of European holidaymakers from the mainland are drawn here in summer, the autumn and winter months are all about peace and relaxation. This is also reflected in the purchase and rental prices. Nowhere in Germany is real estate negotiated as expensively as here.

• The most expensive streets on Sylt

Here are the most expensive streets on Sylt:

• Heideweg / Heidewinkel
• Meadow Path
• Hoboken Way
• Osterheideweg

The most expensive road on Sylt is Hobokenweg in the east of the island.

Hobokenweg in Sylt

Also called the ‘street of the super-rich’, Hobokenweg outstrips all other streets in Germany in terms of price per square metre. Only those who can afford it live here: From wealthy heirs to successful corporate executives. Nowhere else in the entire Federal Republic is it as expensive: property prices here are in fact around 35,000 euros per square metre.

Read more about here:

• The most expensive streets on Sylt

Tegernsee

Those who sometimes need a break from the colourful hustle and bustle of the big city will find it at Lake Tegernsee. The lake is located south of Munich and is easy to reach by car. Thus, the communities around the Tegernsee inspire with their idyllic landscape, the high level of discretion and the breathtaking nature. While the breathtaking view over the Tegernsee and the adjacent valleys is the charm of the Leerberg, the communities of Gmund, Wiessee and Rottach convince with their proximity to the lakeshore.

• The most expensive streets at Tegernsee

Here are also the most expensive streets around the Tegernsee:

• Bad-Wiessee
• Gmund
• Rottach-Egern

The most expensive streets on the Tegernsee are in the municipality in Rottach-Egern.

Rottach-Egern on Lake Tegern

One of the most popular residential areas is Rottach – a community south of Lake Tegernsee. Compared to Leerbach, the villas and apartment buildings here don’t have the greatest lake views, but they do inspire with their proximity to the village centre and the lakeside. Especially individuals who do not like to live on top of the mountain like to settle in Rottach. Property prices here are around 15,000 euros per square metre.

Read more about here:

• The most expensive streets at Tegernsee

Baden-Baden, Juist, Constance & Co.

Baden-Baden, Juist, Constance and Stuttgart are also home to the most expensive streets in Germany. As always, several factors determine the price per square metre. These include, above all, location, infrastructure, the local cultural offerings and the safety of the residential environment.

Here are some more of the most expensive roads in Germany:

• Lichtentaler Allee (Baden-Baden)
• Beach promenade (Juist)
• Alpsteinweg (Constance)
• At the Bismarck Tower (Stuttgart)
• Feuerbacher Heath (Stuttgart)

Most expensive residential streets in Germany: By city

Sources: Image / Engel und Völkers / Lukinski

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 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

Registered traders (e. K.) – foundation, financing, liability & Co.

With regard to the legal form of sole proprietorships, a distinction is made between freelancers, small traders and registered merchants, with the latter being the only legal form variant that must be registered in the commercial register. However, the obligation to register only applies to merchants who are actively engaged in commercial trading – the so-called “gewerbetreibende Kaufleute”. They are also referred to as “actual merchants” and are generally assessed according to the German Commercial Code (HGB).

If you are a sole trader and own a business but do not trade in it, you are considered an “optional trader” and have the choice of whether or not to have your business registered in the commercial register. If you decide not to register, you are subject to the German Civil Code (BGB) as normal. Typical “Kannkaufleute” are, for example, small traders and freelancers.

You can find out more about the individual legal forms here:

• Sole proprietorship (EU)

Foundation & Company Name

In comparison to the other two legal forms, the strictest requirements apply to the establishment of a company for commercial traders: In addition to applying for a tax identification number (tax ID) at your tax office and registering your company at the trade office, you are also required to have an entry made in the commercial register by a notary. At a cost of around 200 to 300 euros, you can thus secure the title of actual businessman or businesswoman. Only after completing this public registration do you have your own company in the legal sense.

You are free to choose the type of company name in many respects, but it must provide information about your commercial status and also be distinguishable from the companies of other traders. You can form a personal company, which describes you as the owner in more detail, or a material company, which reveals more about your business purpose and the associated services, or even a fancy company… It is obligatory that you add the gender-neutral suffix “e. K.” – or alternatively “e. Kfr.” for registered businesswomen or “e. Kfm.” for registered businessmen – to the contingent liabilities of your sole proprietorship. In addition, you can consider registering your company and/or your business name as a trademark to protect your name or your company.

Financing & profit distribution

No minimum capital is required to set up a business as a registered trader. Of course, it is still advisable to have some reserves and to draw up a financing plan in order to be financially prepared in case of unpleasant surprises. In addition, you will incur some costs for the start-up alone, before you have even begun to make a profit with your company. The positive aspect: Your profits are 100 percent yours and you don’t have to share them with anyone!

Liability, accounting & taxes for registered traders

As a sole trader, you have unlimited liability, i.e. with your business assets as well as with your personal assets. By registering, you are obliged to keep accounts and regularly prepare balance sheets and inventories for your business. However, you are exempt from the obligation to publish your business figures and books. Unless you achieve an annual turnover of more than 130 million euros…

A sole trader is always a natural person at the same time. Consequently, registered traders are, of course, first and foremost subject to income tax. In addition, according to tax law, further levies are provided for turnover tax and trade tax.

• Income tax (ESt)
• Value added tax (VAT)
• Trade tax (GewSt)

Registered trader (e. K.) – For whom is it worthwhile?

Do you love the idea of being your own boss and not having to coordinate decisions with other shareholders or managing directors? Then the legal form of a trader could be just right for you! Uncomplicated formation process, zero minimum capital required and no partners, co-founders or shareholder teams to nag you or interfere…. You take the risk and you reap the rewards – 100%.

Why should you register as a merchant? The legal form of a registered businessman (e. Kfm.) or registered businesswoman (e. Kfr.) is worthwhile for those who are prepared to take manageable risks in order to start their own business quickly and easily. You do not need enormous financial reserves and also pay relatively little tax on your profits. A sole proprietorship is therefore ideally suited for young entrepreneurs who not only dream of self-realization, but also want to take their lives into their own hands.

Alternatives to the e.K.: 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
• 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