What is a limited partnership 3

Limited partnership (KG) - FAQs

Answers to the most important questions

  1. What is a limited partnership?
  2. Does the (expected) company size play a role?
  3. How is a limited partnership established?
  4. How are the partners liable?
  5. How is a limited partnership company formed?
  6. Which partners in a limited partnership are authorized to manage?
  7. Which partners in a limited partnership are authorized to represent?
  8. Who is the trade license for a limited partnership?
  9. How does a limited partnership end?
  10. How are the shareholders of a limited partnership insured?
  11. Is the limited partnership an independent taxable person?

1. What is a limited partnership?

The limited partnership is a company managed under its own company, in which at least one partner's liability to the company's creditors must be limited to a certain amount (liability amount) shown in the commercial register (limited partner) and at least one other partner has unlimited liability (general partner).

2. Does the (expected) company size play a role?

The size of the company is irrelevant for the establishment and registration of a KG.

For the question of the accounting obligation, however, certain key figures are decisive (with the exception of GmbH & Co KG - for these the accounting obligation applies regardless of the presence of certain key figures). Entrepreneurial partnerships are then subject to accounting if they generate more than EUR 700,000 in sales per year in two consecutive financial years. In this case, the accounting obligation applies from the second following financial year. If, for example, the sales revenues in the 2017 and 2018 financial years are above the aforementioned threshold, the accounting obligation will arise from the 2020 financial year.However, if the sales revenues in one financial year exceed EUR 1,000,000, the accounting obligation will apply from the following financial year.

3. How is a limited partnership established?

The partners conclude a partnership agreement. No specific form is stipulated by law, but the establishment of a written contract is urgently recommended.

The company must be registered for entry in the commercial register by all shareholders. The signatures of all shareholders must be certified. Certification can either be done by the notary or by the district court.

The KG only comes into being when it is entered in the commercial register.

4. How are the partners liable?

In a KG, two types of shareholders are to be distinguished according to liability, namely the general partner (s) and the limited partner (s).

The General partners be liable

  • personally, with all of their private assets;
  • unlimited ie with no limit on the amount;
  • solidarici.e. not proportionately, but each for the entire debt;
  • primary, i.e. the creditor can turn to one of the shareholders immediately without having to sue the company beforehand.

The action against the general partner can also be brought at the place of jurisdiction of the place of performance of the contractual service.

The Limited partners are only liable up to a certain amount, namely the liability amount, the amount of which is to be contractually stipulated and entered in the commercial register. The law does not prescribe a minimum amount. Liability does not apply if the limited partner makes his mandatory contribution to the company as agreed in the articles of association and the agreed contribution corresponds to the liability amount. However, the limited partner is directly and in addition to the KG debtor of the municipal tax. The limitation of liability does not apply here.

5. How is the company of a limited partnership formed?

The limited partnership can choose between a name, a special company or an imaginary name as a company. The company of a limited partnership must have an additional legal form, such as "limited partnership" or "KG". If a name company is chosen, only the name of a partner with unlimited liability (general partner) can be included in the company name. In principle, the company must be suitable for identifying the company and have a distinctive character. It cannot be misleading. Furthermore, the new company must be clearly different from all companies that already exist in the same place / municipality.

6. Which partners in a limited partnership are authorized to manage the company?

With regard to the management (internal relationship), a distinction must be made between ordinary and extraordinary transactions.

For ordinary Management measures are the sole responsibility of the general partners, each for himself. The limited partners are excluded from the ordinary management of the company. Stand by you ordinary Business thus no Right to have a say or right of objection. However, contractual changes are permitted here and, for example, only the limited partner can be granted management authority or the right to issue instructions to the general partners.

Extraordinary Management measures, however, require the consent of all shareholders and thus also the limited partners. The approval requirement can be changed in the articles of association. Internal restrictions are ineffective vis-à-vis third parties. This means that if, for example, the general partner has not obtained the consent of the limited partner in an extraordinary transaction, the external transaction with the third party is still effective.

7. Which partners of a limited partnership are authorized to represent?

Only the general partners are authorized to represent, each for himself. Both ordinary and extraordinary transactions are covered by the power of representation; no distinction is made here. In the articles of association, however, individual general partners can be excluded from representation or full representation can be agreed instead of individual representation. The changes are to be made evident in the commercial register. The limited partner cannot be granted authority to represent, but he can become an authorized officer or be given a power of attorney.

8. Who is the trade license for a limited partnership?