My goal with this article was to help you understand the differences between legal forms. This should give you an initial idea of the options available to you when starting or transforming a business or succession planning. The legal form of the KG has a natural person as a general partner (called general partner), who is responsible without limitation in the structure of the company. For GmbH & Co. KG, however, the general partner is not a natural person, but a limited liability company. This GmbH is only liable for the assets of its company. If the second general partner of GmbH & Co. KG is also a limited liability company (and not a natural person), both shareholders are now liable to a limited extent. As you can see, there are many things to consider when choosing a legal form. Knowing the pros or cons can give you a lot of peace of mind when transforming your business or creating your estate plan. The most obvious advantage is the limitation of liability by combining two legal forms: the limited partnership and the GmbH as general partner. In addition, the losses of the GmbH & Co. KG can be offset by the profits of other income, and by accepting new sponsors, the company can quickly provide new capital.
Another special feature is the possibility of concentrating the managing authority on a single representative body. In addition, amendments to the articles of association are not subject to the formal requirement of notarial certification – they only have to be entered in the commercial register in accordance with § 162 HGB, which allows GmbH & Co. KG to act very flexibly as a legal form. One tax advantage of the mixed form is in particular the freedom to transfer assets in the context of accounting in a value-neutral manner. In addition, access to profit shares is also simple. This article is published for informational purposes only. For legal and tax advice, please contact www.counselhouse.eu or your local tax advisor. The new legal form of the legal entity that changes its legal form must be registered by the bodies of the GmbH for entry in the commercial register. With registration, the GmbH GmbH & Co. KG.
Shareholders now receive KG shares converted for their GmbH shareholdings. The change of legal form is therefore supplemented by commercial law. The change of legal form to GmbH & Co. KG requires a resolution of § 193 UmwG of the shareholders of the legal entity changing its legal form. This requires a majority of at least three-quarters of the votes cast at the general meeting of shareholders of the GmbH § 233 para. 2 UmwG.Specifically, §§ 194 and 234 UmwG specify the content of the conversion resolution consulted. These include: This regulation is one of the main advantages of the legal form of GmbH & Co. KG, as it is not possible in other company forms such as GbR, OHG or KG, where the principle of self-organization applies (i.e. only a fully responsible shareholder can do business). KG sponsors are excluded from management.
The GmbH & Co. KG is one of the most common forms of business in the Federal Republic of Germany. Indeed, the choice of this legal form can offer shareholders various advantages in individual cases. However, over the decades, many different variants of the GmbH & Co. KG, which are not equally suitable for all companies due to their partially different properties. An advantage of the GmbH & Co. KG over the GmbH is the easier payment of annual surpluses. In the absence of a capital maintenance principle, capital maintenance can generally be paid in full to shareholders. Conversely, without the principle of capital preservation, the acquisition of capital is facilitated at the same time, as this does not necessarily increase the share capital in the balance sheet, as with the GmbH. Potential investors can thus participate as limited partners without increasing the payment block in accordance with § 30 GmbHG.In In addition, GmbH & Co. KG is more flexible than GmbH due to the informal change of shareholders.
A general partner is the partner of a limited partnership (KG) who has unlimited personal liability. In the case of a GmbH & Co. KG, the general partner is a GmbH. This has the advantage of not being a personally liable natural person as in the case of a general partnership, but a legal person such as the GmbH. The GmbH is responsible for all its business assets. Internally, GmbH & Co. KG is founded as a limited partnership by the conclusion of a partnership agreement. As soon as the limited partnership commences its commercial activities or is registered in the commercial register, it is also established externally. In this context, particular care must be taken to ensure that the articles of association are of sufficient quality, because unlike the articles of association of a GmbH, which must be notarized, the articles of association of a limited partnership are not subject to any formal requirements. In addition, the limited partnership does not require a minimum contribution. However, the personally liable partner GmbH must continue to have a share capital of at least 25,000.00 euros.
Then, the limited partnership and the general partner GmbH, if they have just been founded, must be notarized in the commercial register. It is also important that companies differ from each other, that is, they do not have to be completely identical. However, a single addition is enough to set them apart. Detailed information on the company registration procedure can be found on the following page: Another variant of the GmbH & Co. is the so-called unitary company. A characteristic of the unitary company is that KG itself is the sole shareholder of the personally liable partner GmbH. Legal harmonisation is achieved through the direct involvement of the KG in its personally responsible partner. The complex legal structure of the statutes is therefore largely obsolete. For this reason, the unitary company is considered in some parts of legal circles as the most coherent and perfect form of GmbH & Co.
