How does a simple form of company formation take place?
As an alternative to the British limited company, the Unternehmergesellschaft (haftungsbeschränkt) has been available in Germany since 2008. This is a GmbH with a smaller minimum share capital. Instead of the 25,000 euros required for a normal GmbH, the Unternehmergesellschaft (UG) can be founded with a share capital of one euro. This legal form can be expanded with additional investors in the form of limited partners to form a UG & Co. KG with additional investors in the form of limited partners.
Founding a company with foresight - the GmbH & Co. KG
The GmbH & Co. KG combines the characteristics of the GmbH and the limited partnership (KG). The GmbH appears as the general partner of the KG with limited liability share capital. The limited partners of the GmbH & Co. KG are only liable for their capital contribution. The management of the GmbH & Co. KG is carried out by the management of the GmbH. All limited partners are completely excluded from the management of the company.
What are the advantages and disadvantages of the legal form of a GmbH & Co. KG associated with it?
Advantages:
- General partner is only liable with the share capital of the GmbH
- No access to private assets of the management
- GmbH & Co. KG is a partnership for tax purposes
- Uncomplicated change of partners among the limited partners
- Options for structuring the appropriation of profits
Disadvantages:
- Additional expenses due to company formation of two independent companies
- Higher administrative costs due to two independent companies
- A share capital of at least EUR 25,000 is required for the general partner GmbH
- Limited creditworthiness in the credit assessment of banks
- Management remuneration does not constitute an operating expense
Which type of company is a GmbH & Co. KG?
As a business founder, you do not want to be liable with all your assets. With the GmbH & Co. KG, you only need the share capital of the GmbH. This can be provided in part in the form of a contribution in kind. The legal succession in the management is not regulated. The advantage of the GmbH & Co. KG is that the general partner and managing director of the GmbH is not a natural person. Another advantage of the GmbH & Co. KG is the flexible admission of additional investors in the form of new limited partners. You can set up the GmbH & Co. KG as a one-man company. In this case, the owner simultaneously holds all shares in the GmbH & Co. KG AT THE SAME TIME.
Founding a UG & Co KG389.00 EURO - including advice on the start-up process
