GmbH & Co. KG

GmbH & Co. KG

The GmbH & Co. KG is a special form of the limited partnership (Kommanditgesellschaft) in which the general partner with unlimited liability (Komplementär) is a GmbH. This structure combines characteristics of both a partnership and a corporation and operates a commercial business.

Although the general partner is theoretically liable without limitation, the liability remains limited because the GmbH is liable only with its own assets.

This structure allows the combination of the limited liability of a corporation with the tax advantages of a partnership. Additionally, the GmbH & Co. KG offers more flexible capital-raising opportunities due to the limited partner contributions, which is why it is increasingly used by medium-sized enterprises.

Furthermore, the GmbH & Co. KG facilitates succession planning, since the death of a natural person partner typically creates a liability risk for the heirs. This risk is eliminated by having a corporation as the general partner.

The advantages of establishing a GmbH & Co. KG include:

• Limited liability, as the GmbH is fully liable with its entire assets
• Simplified succession planning
• Non-partners can serve as managing directors of the involved GmbH

The disadvantages of a GmbH & Co. KG are:

• Higher administrative costs, since both the GmbH and the GmbH & Co. KG are subject to accounting obligations, must prepare annual financial statements, and file tax returns
• Publication requirements: A GmbH & Co. KG is obligated to disclose its annual financial statements

Other legal forms can be found in the articles on AG, GbR, GmbH, KG, and OHG.

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