Limited Partnership with a Limited Liability Company as General Partner

Executive Summary

German Name: GmbH & Co.KG

General Information: KG whose (mostly only) general partner is a GmbH (limited liability company); limitation of liability is available for all individuals

Incorporation: see private limited partnership

Minimum Capital: 25,000 for limited liability company

Board Structure: see private limited partnership

General Information

The GmbH & Co. KG is a KG whose (mostly only) general partner is a GmbH (limited liability company).

There was disagreement in the past as to whether this corporate structure was admissible at all. However, it is fully established today, and there is steady growth in the number of limited partnerships with a limited liability company as general partner.

Its popularity goes down to the fact that limitation of liability is available for all individuals.

The company’s general partner is personally liable, but since in this structure, a limited liability company is general partner, the GmbH & Co. KG is only liable with its own assets so that no liability of the partners is engaged at all.

Compared to the limited liability company the GmbH & Co. KG has structural and tax advantages.

It is commonly used as a corporate structure in the field of family businesses, public businesses and other companies with a manageable circle of associates.


Concerning incorporation, the provisions governing the private limited partnership apply.

Capitalisation and Financing

The limited partner is not obligated to make a contribution. For the limited liability company, the usual amount of 25,000 € has to be issued.

Board Structure

See private limited partnership.

Annual Costs

Annual Costs will arise in the form of legal, information and control costs especially as regards accountancy, auditing and publicity. Other possible items are legal and tax consultancy as well as costs for various supervisory and managing individuals.

The amount of these costs varies and depends on size, structure and equity requirements of the company. Costs tend to be lower for partnership structures than for corporations.

Corporate Taxation and Financial Reporting

In Germany the taxable income of a private company is determined at enterprise level although the company itself is not a tax subject.

In fact, a piercing of the corporate veil occurs in respect of the partners.

Thus, for tax purposes, profits generated at enterprise level are treated equally to the partner’s other revenue.

The limited partnership with a limited liability company as general partner is obligated to provide a tax balance sheet. It is also subject to the supplementary regulations of Secs. 264ff of the German Commercial Code (Handelsgesetzbuch - HGB -) which contain deviations concerning obligations of accountancy, auditing and disclosure.

An annex as well as a statement of affairs have to be provided with the annual report.

Employee Participation in Corporate Bodies