GmbH & Co. KG formation: Kickstart your enterprise with firma.de

The corporate form UG & Co. KG is very similar to a GmbH & Co. KG with the main difference being a much lower startup capital requirement for the former.

The UG & Co. KG is a combination of two corporate forms: a Kommanditgesellschaft (KG) - a type of limited partnership - and a UG (haftungsbeschränkt) - a special form of GmbH.

As with the GmbH & Co. KG, the UG is the Komplementär (unlimited partner or general partner) within the KG structure. This KG also has unlimited liability, but only through its corporate form.

The liability of the Kommanditisten (limited partners) of the UG & Co. KG is limited to their capital investment.

Your official company name must contain the suffix "GmbH & Co. KG", e.g. Taxodrome GmbH & Co. KG or Homerun GmbH & Co. KG.

This way the company structure is transparent and shows that one of the general partners is a GmbH rather than a natural person.

Simplified capital raising

Your GmbH & Co. KG can quickly increase its capital by merely adding investors as limited partners.

Limited liability

A GmbH & Co. KG enjoys limited liability. Since the general partner is a legal entity with limited liability, damages are limited to the GmbH’s company assets.

Secure continuance of the company

Unlike a regular KG, this corporate hybrid can exist forever using the same corporate name. As the GmbH is a legal person, this guarantees the continuance of its name. However, this is not the case for a regular limited partnership - when one of its partners dies this triggers the dissolution of the entity.

A GmbH & Co. KG is represented externally by the general partner - the GmbH’s managing director.

Limited partners are usually not involved in day-to-day management, but can exercise their right to vote on extraordinary decisions.

You can choose to employ external experts as managing directors of the GmbH rather than appointing a shareholder.

This option is not available to regular limited partnerships since only the general partners are entitled to lead the company.

The GmbH & Co. KG consists of a GmbH as a general partner plus one or more limited partners. The company's notarised articles of association determine the rights of all partners.

According to the German commercial code, decisions of the partners should be unanimous, with any disagreements being regulated within the articles.

While special rules apply to the GmbH in a GmbH & Co. KG with regards to capital deposits and management, limited partners have the same rights and obligations as they would in a conventional KG.

Within the GmbH & Co. KG structure, the GmbH is not obliged to invest the totality of its assets into the partnership.

Furthermore, if a Kommanditgesellschaft is converted into a GmbH & Co. KG it is possible that the GmbH functions only as a limited partner without making a capital investment.

For limited partners, a copulsary contribution (Pflichteinlage) is set is the amount that limited partners have to contribute to join the company. This amount is entered into the commercial register (Handelsregister) and determines what each partner is liable for.

The GmbH & Co. KG has a whole doesn’t have to pay corporate tax (Körperschaftssteuer) or income tax (Einkommenssteuer).

However, profits generated by the GmbH as a general partner are taxable, and KG limited partners as natural persons have to pay income tax.

The GmbH & Co. KG itself is subject to trade tax, but not its partners.

If the KG acquires or sells its property, property transfer tax must be paid on those transactions.