Introduction Ltd & Co KG

A KG (Kommanditgesellschaft) is a type of partnership in which at least one partner is fully liable with their entire assets (general partner) and at least one other partner is liable only up to the amount of their contribution (limited partner).  

It is common practice to appoint a corporation as the general partner. This can be done through a GmbH, AG, or even a Limited. This arrangement prevents the entrepreneurs' private assets from being liable. At the same time, the advantages of a partnership are retained (more on this below). By using a Limited as a fully liable partner, the required minimum capital investment for a new project can also be significantly limited.  

For instance, an entrepreneur can offset profits from a Kommanditgesellschaft with losses from other ventures (e.g., another Ltd & Co KG or from leasing and renting).  

The Ltd & Co KG can also be established as a one-man company. Initially, a Ltd is founded. This entity is a separate legal personality and acts as the fully liable partner (general partner) of the Ltd & Co KG. The entrepreneur and/or additional persons become limited partners with a freely chosen contribution.  

Further advantages of the LTD & Co KG

• No hidden profit distributions with capital withdrawals without prior determination  
• No trade tax up to the tax-free amount of €24,500
• Capital acquisition through the addition of limited partners
• Costs for acquiring shares in an Ltd & Co.KG are capital acquisition costs
• A German KG is registered in the commercial register 
• The partnership agreement does not need to be deposited and can therefore be easily amended