In short
The general partner (Komplementär) is the personally liable partner of a limited partnership (Kommanditgesellschaft, KG) (Sec. 161 (1) HGB). They are liable for the KG's debts without limit with their entire assets (Sec. 126 HGB), usually manage the business and represent the KG externally. Every KG needs at least one general partner and one limited partner; a GmbH or UG can also be the general partner.
Key points
- In the statute, the general partner is called the "personally liable partner". The counterpart is the limited partner (Kommanditist), who is only liable up to their liability amount.
- Liability is unlimited, also covers existing debts on joining and continues for up to five years after leaving.
- Management and representation lie with the general partner; the partnership agreement can exclude individual general partners from them.
- If a general partner dies, they leave the partnership. Their heirs only take their place if the agreement provides for this.
Contents
- What is a general partner?
- General partner and limited partner: the difference
- How is the general partner liable?
- Rights of the general partner
- What may a general partner not do?
- Is the general partner always the managing partner?
- Who can be a general partner?
- GmbH or UG as general partner
- Joining, leaving, death and change of role
- Taxes and social security in brief
- What the partnership agreement should say about the general partner
- Forming a KG with Recht 24/7
- FAQ
What is a general partner?
A KG has two types of partners. For the limited partners, liability is limited to a specific amount, the liability amount (Haftsumme). For the others there is no limit; the statute calls them personally liable partners (Sec. 161 (1) HGB). In practice they are called Komplementäre, and a GmbH in this role is called a Komplementärin. The word goes back to the Latin complementum, the complement.
The rules of the OHG (general partnership) largely apply to them (Sec. 161 (2) HGB); the term also exists for the partnership limited by shares, KGaA (Sec. 278 (1) AktG). Since the MoPeG (1 January 2024), many sections have new numbers: liability on joining is now found in Sec. 127 HGB instead of Sec. 130 HGB. Our guide to the MoPeG gives an overview.
General partner and limited partner: the difference
| Feature | General partner | Limited partner |
|---|---|---|
| Liability | unlimited, personal, jointly and severally (Sec. 126 HGB) | up to the liability amount, excluded insofar as the contribution has been paid (Sec. 171 (1) HGB) |
| Management | yes, entitled and obliged (Sec. 116 (1) HGB) | excluded (Sec. 164 HGB) |
| External representation | yes, unless excluded in the agreement (Sec. 124 (1) HGB) | no (Sec. 170 (1) HGB) |
| Extraordinary transactions | resolution of all partners (Sec. 116 (2) HGB) | votes on them (Sec. 164 HGB) |
| Information | inspection of documents and information (Sec. 717 BGB via Sec. 105 (3) HGB) | copy of the annual financial statements, inspection, information (Sec. 166 HGB) |
| Non-compete obligation | yes (Sec. 117 HGB) | no (Sec. 165 HGB) |
| Contribution | according to the agreement, also possible without a capital contribution | agreed contribution, liability amount in the commercial register |
| Commercial register | name, date of birth, place of residence (Sec. 106 (2) no. 2 HGB) | additionally the liability amount (Sec. 162 (1) HGB) |
| Profit | according to the agreed shareholding ratios (Sec. 120 HGB, Sec. 709 (3) BGB) | likewise, payout restricted in the event of losses (Sec. 169 HGB) |
| Death | leaves the partnership, heirs only with a succession clause (Sec. 130 (1) no. 1 HGB) | partnership continues with the heirs (Sec. 177 HGB) |
How is the general partner liable?
Unlimited, direct, joint and several
The general partner is liable to the KG's creditors personally, with all their assets and alongside the partnership (Sec. 126 HGB). To enforce against their private assets, the creditor needs an enforceable title against them personally (Sec. 129 HGB).
Simplified example: the KG owes a supplier €200,000, and its assets amount to €50,000. The supplier can immediately claim the full €200,000 from the general partner. The limited partner has a liability amount of €20,000, of which €5,000 has been paid in: they are still liable for €15,000. Whatever the general partner pays, they can claim back from the KG.
Liability on joining
Anyone who joins an existing KG as a general partner is also liable for the debts incurred before they joined (Sec. 127 HGB). Check the balance sheet and outstanding liabilities beforehand.
Liability after leaving
Anyone who leaves remains liable for the obligations incurred up to that point if they fall due within five years and are established in court or enforced against them (Sec. 137 (1) HGB). The period begins when the creditor learns of the departure or when it is registered, which is why it should be entered in the register quickly. Several general partners are liable side by side as joint and several debtors; the settlement between them is best regulated in the agreement.
Rights of the general partner
- Management: each general partner may in principle act alone; if another managing partner objects, the transaction does not go ahead (Sec. 116 (3) HGB).
- Representation: covers all transactions, including land and Prokura. Restrictions have no effect towards third parties (Sec. 124 (4) HGB).
- Information: inspection of documents and information (Sec. 717 (1) BGB via Sec. 105 (3), Sec. 161 (2) HGB).
- Profit: payout of the share of profit according to the adopted annual financial statements (Sec. 122 HGB). Without a contractual rule, the agreed shareholding ratios count, then the values of the contributions, and lastly per capita (Sec. 709 (3) BGB).
- Termination: for an indefinite term, with six months' notice to the end of the financial year, and without notice for good cause (Sec. 132 HGB).
What may a general partner not do?
- Compete: no business in the KG's line of trade and no participation as a partner with unlimited liability in a similar company without consent (Sec. 117 HGB); otherwise damages or surrender of the profits (Sec. 118 HGB).
- Decide on extraordinary transactions alone: this requires a resolution of all partners (Sec. 116 (2), Sec. 164 HGB).
- Contract with themselves: contracts between the KG and the general partner require an exemption from Sec. 181 BGB.
- Make unauthorised withdrawals: they then owe the KG interest (Sec. 119 (2) HGB).
The annual financial statements (Sec. 120 (1) HGB) and the joint applications to the commercial register (Sec. 106 (7) HGB) are also mandatory. The KG reports its beneficial owners to the transparency register (Sec. 20 (1) GwG); the general partner is only one of them if, for example, they hold more than 25% of the shares or voting rights or exercise comparable control (Sec. 3 (2) GwG).
Is the general partner always the managing partner?
Under the statute, yes: personally liable partners are entitled and obliged to manage the business (Sec. 116 (1) HGB) and authorised to represent the partnership (Sec. 124 (1) HGB). The partnership agreement can deviate from this (Sec. 108, 163 HGB) and, where there are several general partners, exclude individual ones. However, at least one must be able to represent the KG, because limited partners as such cannot do so (Sec. 170 (1) HGB). A limited partner can be granted Prokura. If a GmbH is the general partner, its managing director acts, who does not have to be a shareholder.
Who can be a general partner?
Any natural person, a legal entity such as a GmbH, UG or AG, and a partnership with legal capacity (Sec. 106 (2) no. 2 HGB). The KG needs at least one general partner and one limited partner (Sec. 161 (1) HGB). For a general partner who is a minor, the parents need the approval of the family court for the partnership agreement (Sec. 1643 (1), Sec. 1852 no. 2 BGB).
GmbH or UG as general partner
A GmbH as general partner is liable without limit, but only with its own assets. In this way, no natural person is liable without limit, as long as the limited partners have paid their contributions. The company name must make this clear (Sec. 19 (2) HGB), hence "GmbH & Co. KG". The general partner GmbH needs €25,000 in share capital; alternatively, a UG takes on the role. This also works on your own: as the shareholder of the general partner GmbH and at the same time the limited partner. Our guide to the GmbH & Co. KG explains structure, taxes and costs. We form a GmbH & Co. KG for €519 net and a UG & Co. KG for €469 net, each plus VAT, notary fees, court fees, IHK and trade registration costs.
Joining, leaving, death and change of role
New general partner: joining amends the partnership agreement and, without a rule to the contrary, requires the consent of all partners. It is registered with the commercial register (Sec. 106 (6) HGB), and the newcomer is also liable for existing debts (Sec. 127 HGB).
Termination: the general partner leaves the partnership (Sec. 130 (1) no. 2 HGB), receives reasonable compensation and is released from the partnership's debts (Sec. 135 HGB). Towards creditors, they remain liable for five years.
Death: the general partner leaves the partnership unless the agreement provides otherwise (Sec. 130 (1) no. 1 HGB), and the heirs receive the compensation. With a succession clause, the share passes to the heirs. Each heir can then apply to become a limited partner and, if this is refused, terminate without notice, within three months of learning that the inheritance has passed to them; the period does not end before the period for disclaiming the inheritance. They are then liable for the debts incurred up to that point only under inheritance law (Sec. 131 HGB).
Change of role: if a general partner becomes a limited partner, they remain liable for the debts incurred until registration under the rules on continuing liability, even if they continue to manage the business (Sec. 137 (3) HGB). If a limited partner becomes a general partner, they are liable without limit from then on.
No general partner left: without a general partner, there is no KG. If the last one leaves, a new one must join; otherwise the partnership is dissolved or continued in another form. If only one partner remains, the partnership is extinguished without liquidation and its assets pass to that partner (Sec. 712a BGB via Sec. 105 (3), Sec. 161 (2) HGB).
Taxes and social security in brief
For tax purposes, the general partner is a co-entrepreneur (Mitunternehmer). Their share of profit and the KG's remuneration for their work, for loans or for assets made available are income from a commercial business (Sec. 15 (1) sentence 1 no. 2 EStG). The KG pays trade tax with a €24,500 allowance (Sec. 11 (1) GewStG), which the partners can largely credit (Sec. 35 EStG). As a partner, a general partner is as a rule not employed by the KG in a way that is subject to social security contributions. Clarify the details with your tax adviser and the German Pension Insurance (Rentenversicherung).
What the partnership agreement should say about the general partner
- Management and representation, with several general partners sole or joint authority
- List of transactions requiring consent
- Remuneration for work or a liability fee (only exists with a contractual rule)
- Profit distribution and withdrawals
- Non-compete obligation and exemption from Sec. 181 BGB
- Succession on death and change of role
- Termination, withdrawal and compensation
Forming a KG with Recht 24/7
FAQ
Who is the general partner and who is the limited partner?
The general partner is personally liable without limit and usually manages the business. The limited partner is only liable up to their registered liability amount and is excluded from management.
What is a general partner, explained simply?
The KG partner who answers for the debts with all their assets and, in return, runs the day-to-day business.
Is the general partner always the managing partner?
Under the statute, yes, but the agreement can exclude individual general partners. At least one must be able to represent the KG.
What may a general partner not do?
Without consent, they may not compete (Sec. 117 HGB), may not decide on extraordinary transactions alone and may not conclude contracts with themselves without an exemption (Sec. 181 BGB).
Can a GmbH be a general partner?
Yes, that is the GmbH & Co. KG. The GmbH is only liable with its assets; a UG can also take on this role.
What happens if the general partner dies?
They leave the partnership, and the heirs receive compensation. Only with a succession clause do the heirs take their place, and they can apply to become limited partners (Sec. 131 HGB).
Is a general partner still liable after leaving?
Yes, for the debts incurred up to that point if they fall due within five years and are established or enforced against them (Sec. 137 HGB).
Does a general partner have to make a contribution?
Only if the agreement provides for it; their contribution can also consist of their labour (Sec. 709 (1) BGB). In the GmbH & Co. KG, the general partner GmbH usually has no share in the assets.
Terms used in this guide
About the author
Dr. Georg Schröder, LL.M.
Dr. Georg Schröder is a lawyer and writes the guides of Recht 24/7. He explains legal questions so that you can follow them without legal training, and he reviews every guide before it is published.
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