How does a GmbH work?

KG is a confusing acronym with so many abbreviations. Even if you know what a GmbH or a KG is, it might not be clear what exactly a Was ist eine GmbH & Co KG is. Read this article to get an overview of the legal form of a GmbH & Co KG, including the definition of Kommanditgesellschaft (“limited partner”), Komplementär (“general partner”), and other key terms.

Are you interested in knowing more about the types of companies in Germany? 

Andreas is an experienced business consultant with seven years of experience advising companies in Germany. In the event that you’d like to talk with me one-on-one about company structures, I would be more than glad to answer any questions you have.

Does the abbreviation GmbH & Co KG mean anything to you?

It is a German company with a limited liability & a limited partnership, otherwise known as a limited liability company and limited partnership, or a limited liability company and a limited partnership.

How does a GmbH and Co.KG differ from a limited liability company?

In the German corporate law world, as the name suggests, the GmbH & Co. GbR is a hybrid of the legal forms the GmbH (Gesellschaft mit beschränkter Haftung – a limited liability company type of entity) and the KG (Kommanditgesellschaft – a limited partnership type of entity). Although their hybrid form is an alternative to the company, GmbH & Co. Co. Co., on the other hand, is still a KG (limited partnership) and, therefore, is categorised as a partnership (Personengesellschaft).

Under the KG legal structure, there is a natural person that is the general partner (also known as a Komplementär), who has unlimited liability within the business structure. The only difference is that, in the case of a GmbH & Co. KG, the general partner is not an individual but rather a company that has limited liability. In this case, only the assets of the company will be liable. In the case where the second general partner in the GmbH & Co. KG is also a limited liability company (rather than a natural person), both partners will now have limited liability.

 There are three shareholders in the GmbH & Co KG

In connection with the legal forms KG and GmbH & Co KG, the terms “general partner” and “limited partner (Kommanditist)”, which are used to describe the different forms by which the partners are categorized, are frequently used. This is what firma.de has outlined for you as a short definition:

The legal form of the company is GmbH & Co KG. What is a general partner? Let us define it for you.

It is important to note that a general partner is a partner who has unlimited personal liability under a limited partnership (KG). The general partner of a GmbH & Co. KG, the general partner of the company is a GmbH. This has the advantage of ensuring that a liability is not borne by a natural person, as is the case with a general partnership, and is instead borne by a legal entity, such as a GmbH. It is the company’s responsibility to ensure that all the assets of the company are protected.

In a company with the legal form GmbH & Co KG, what is the role of the general partner? – A brief explanation

In a limited partnership (KG), the limited partner is one of the owners, but his or her liability is usually confined to the amount of liability entered in the company’s commercial register.

Is there anything to be considered when forming a GmbH & Co. KG company?

Forming a GmbH & Co. Co. Co.KG requires at least one partner who is personally liable. A GmbH (limited liability company) is formed first. Once it is entered in the Handelsregister (Companies Register), the GmbH & Co. KG is formed.

Die Satzung (Gesellschaftsvertrag) or charter specifies the legal basis for a GmbH & Co. KG. If this is also entered in the Handelsregister, there is full liability limitation for the general partners.

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