Partnership Company

General Information

The partnership company is a corporate structure used in the co-operation of members f the free professions such as of lawyers, tax advisors, medical doctors or journalists.

Only individuals can become partners.

By its character, the partnership company is a sub-species of the civil law partnership, but a number of rules governing the general partnership apply.


Incorporation is by conclusion of partnership agreement. As mandatory elemenst, this must contain the name and domicile of the partnership, the full names as well as the profession and place of residence of each of the partners, and the purpose of the partnership.

Entry into the register of partnership companies is constituent.

For register entry, above and beyond the information provided in the partnership agreement, each partner’s date of birth power of representation and the membership of each partner in a free profession must be indicated.

After the partnership agreement has been signed but if the partnership company has not yet been entered into the register, the provisions governing civil law partnerships apply.

Capitalisation and Financing

There is no minimum contribution at the time of setting-up.

 Board Structure

In principle every partner is authorized to manage business unless this has been excluded.

The partners’ power of representation is determined by the rules relating to general partnerships.

Consequently every partner has unlimited individual power of representation while collective power of representation can be provided for.

The company is itself exposed to liability. In principle, at the same time, all partners are liable personally and unlimited as joint and several debtors.

Annual Costs

Annual Costs will arise in the form of legal, information and control costs especially as regards accountancy, auduting 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 Accounting

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 partnership company is not obligated to maintain accountancy, but rather has to produce a statement of revenue profits.

Employee Participation in Corporate Bodies