The forms of division of operations can be distinguished by three characteristics: On the one hand, the origin of the division of operations. A distinction is made between genuine and spurious division of operations. However, these two forms do not have different consequences and effects.[17] Furthermore, the division of operations can also be distinguished on the basis of the participating legal entities, so that there can be a joint entrepreneurial or capitalist division of operations. [18] Lastly, the division of operations can also be distinguished by economic characteristics[19], such as setting up a production and distribution company and linking them by means of contracts. [] 20]

In the video we explain strategies for avoiding the division of operations and for tax-neutral dissolution, should it have come to one.

1st Real operating split

A true division of operations is the division of a previously unified company into two or more companies. As a rule, one company takes over the active business part (operating company) and the other company holds the fixed assets (owning company). The required assets are then left to the operating company for use by rental or lease contracts. [] 21]

2. Fake operating split

The difference between an improper and a genuine division of operations lies in the fact that at the previous stage there was no single enterprise. Either a new company is founded into the already existing company, which is then connected by the factual and personnel connection, or two already existing companies develop the prerequisites for the division of operations only later. This is possible through a change in the company structure or a re-letting of an essential operating basis.[22] For example, a false division of operations also arises due to a lease of an essential operating basis by shareholders of a GmbH for a commercial purpose. As a result, the GmbH becomes a holding GmbH and the shareholders would operate a partnership as an operating company. [] 23]

Classical division of operations

The classical division of operations describes the division of a sole proprietorship or partnership into an ownership partnership or partnership. sole proprietorship and an operating corporation. This is the most common form of business splitting, because of the advantages of individual enterprises or companies. partnership with that of a corporation. The classical form of division of operations can be established both as a genuine and as a false division of operations, since only the connection of a sole proprietorship or a partnership with a limited company is fundamental for this division. [] 24]

Reverse operating split

The reverse case of the classical division of operations, i.e. a corporation as a holding company and a partnership in the function of an operating company, is referred to as the reverse division of operations. For liability reasons, this is at first glance an unusual design. However, the auditing and publicity obligations of the corporation can be reduced, since the holding company is generally to be regarded as a small corporation according to § 267 (1) HGB or even as a micro-corporation according to § 267a HGB. If these limited liability companies were to be covered by the simplification arrangements, this arrangement could be a working solution in individual cases. [] 25]

The division of the ownership and operating company takes place within the framework of the joint entrepreneurial division of operations between two partnerships. The limitation of liability intended within the framework of the division of the company is therefore only achieved by setting up a GmbH & Co. KG as operating company, since the shareholders of the partnerships would be personally liable in full. [26] In the case of the two linked partnerships, however, it is questionable how the provision of § 15 (1) S. 1 No. 2 (2) HS EStG is to be viewed in relation to the case law of the division of operations. In both circumstances, income from the ‘transfer of assets’ is listed, so that the assets are either held in the special assets of the operating partnership or remain in the fixed assets of the holding company. According to the opinion of the BFH from 1996, which continues to this day, the facts are to be interpreted in such a way that, with the present conditions of the division of operations, the remainder of the assets in the fixed assets of the holding company takes precedence over the provisions of § 15 (1) S. 1 No. 2 2 HS EStG has.[27]

The form of the capitalist division of operations is determined by the active corporations as owners and operating enterprises. The holding company’s shares are held in the assets of the holding company. However, the division of operations can only occur in a parent subsidiary. The occurrence of the division of operations in sister companies is excluded. [] 28]