date | theme

29. April 2021 | Holding GmbH shares in special assets – Use tax benefits (this contribution)

26. May 2020 | GmbH & Co. KG – Advantages through different variants of the corporate form

12. May 2020 | The profit sharing at OHG / KG and GmbH & Co. KG – legal starting position and design options

08. September 2017 | GmbH & Co. KG Taxation: 5 advantages of income tax & business tax

In the case of a limited partnership (KG) there is a limited partner who is liable with his contribution. In addition, there must be at least one general partner, who is liable with all his assets. Since the general shareholdership is usually not to be taken over by natural persons due to private liability, the general shareholder often uses a specially managed general shareholder GmbH. Therefore, the name of the company must now be GmbH & Co. KG. However, the problem arises that the limited partner must hold the GmbH shares held by him in special operating assets. The conditions for this are clarified below.

As a shareholder (commander) of a limited partnership, he usually assumes full liability with a partnership, including his private assets. Insofar as the shareholder now wants to take advantage of the corporate advantages of a GmbH & Co. KG, a special construction must be made for this. Therefore, the same shareholder often establishes or takes over a GmbH, which acts as a general partner of GmbH & Co. KG. As a result, this GmbH and its share capital assume liability for claims against GmbH & Co. KG. However, the limited partner is still liable with his deposit entered in the commercial register. Nevertheless, GmbH & Co. KG in its legal form as a partnership can continue to use the tax advantages of taxation compared to a pure capital company.

Usually, in such a case, the limited partner is involved in the management by the Komplementär-GmbH or exercises it independently. Finally, this is important for the later allocation of the GmbH shares.

1.2. GmbH shares as special operating assets

Accordingly, shares in GmbH could be partly allocated to the special operating assets (SBV) of the limited partner at GmbH & Co. KG. Otherwise, the participation would constitute private assets of the limited partner, with a decisive disadvantage arising.

However, conditions apply for the belonging of assets to a special company assets of a shareholder. In the following, it will be clarified in which cases these are assigned to the special operating assets.

2. What is special business assets?

For partnerships, different regulations apply with regard to assets compared to corporations. Because the entire asset is influenced by various regulations. In principle, one assumes a total hand for a partnership. This includes all economic goods which legally and economically belong to the company. These serve directly for the operation of the company or the owners can be excluded from its use during the entire period of use of the asset. Based on the total assets, the respective profit share for the shareholders is determined.

In addition, the assets of the partnership include special assets (SBV). This arises insofar as assets which are attributable to the shareholder serve the company for the achievement of the operational purpose or its participation. For example, the lease of a property or a GmbH shareholding of the shareholder can be listed here.

In addition, the SBV allows assets from one company’s assets to be transferred to another partnership in a tax-neutral manner. The provision of § 6 Abs. 5 EStG enables transfers, i.e. Transfers of assets between different business assets and especially special business assets at book values. Thus, when withdrawing from an operating asset (e.g., in the case of a division of operations of a previous GmbH), a discovery of the hidden reserves can be avoided. This is an enormous advantage in business conversions.

Required special assets are available if the use of an asset of more than 50% is attributable to the company. Under this, it can be decided in individual cases whether it should be assigned to the arbitrary special operating assets. However, any economic good which is used for less than 10% of its business is automatically counted as the private assets of the shareholder.

3.2. Special assets I

This can still be distinguished into special assets I and II of the shareholder. The first category includes assets which are operationally used by the partnership. This mainly includes real estate, which is tax-related to the company. However, they are still to be assigned to the shareholder under civil law.

3.3. special assets II

Furthermore, the operating assets of a partnership according to § 15 para. 1 s. 1 no. 2 also those assets which belong to a partner if they support his participation in the partnership. Consequently, the relevant term special assets II is used for this purpose.

3.4. Special operating income and expenditure

Now a separate special business asset applies to each shareholder. Thus, the associated special balance sheet includes the company-specific facts. The lease fees already mentioned above thus represent special operating income (SBE) at the shareholder and special operating expenses (SBA) at the company. Accordingly, all business transactions taken into account ultimately result in a special profit or a special loss for the shareholder. This is added to the profit or loss from the total hand assets. This results in the profit attributable to the shareholders from the profit of the total assets and the profit from the special assets.

4. regulation on GmbH shares in the SBV

4.1. Participation in the Management Board of the GmbH

The judgment of the BFH[1] shows that certain conditions make it possible to allocate the shares of the GmbH to the special operating assets II or fail accordingly. Thus, the participation in the GmbH can only be Sonderbetriebsvermögen II if the limited partner can influence the management of the GmbH & Co. KG due to his participation in the GmbH.

4.2. Amount of the investment in the GmbH

The level of participation of the limited partner in Komplementär-GmbH plays a special role. Thus, according to the judgment of the BFH, at least a participation in the amount of 10% of the limited partner in the Komplementär-GmbH is required, provided that the resolution of the GmbH as usual with a majority of the votes according to § 47 para. 1 GmbHG. Although a resolution is not possible without the cooperation of the limited partner, this represents a sufficient participation in the GmbH. This allows him to exercise significant influence on the management. Notwithstanding the lower shareholding ratio, it would be possible to allocate the shares of the GmbH to the special operating assets of the limited partnership.

4.3. Business operations of the GmbH

Finally, the GmbH may be entrusted exclusively with the management of the GmbH & Co. KG, any further business operations should be of absolutely secondary importance.

The shares of the GmbH, which are in the special assets II of the GmbH & Co. KG, have a special advantage. Because by external financing of the shares arise financing costs in the form of interest. Through the inclusion of the GmbH shares in the special business assets of the partnership, this allows the interest deduction for any loans taken out for financing. It is therefore of considerable importance whether the participation is part of the operating assets or not. Therefore, you should definitely use this advantage when converting or founding a GmbH & Co. KG, we are happy to help with the required corporate law arrangements. In addition, we will be happy to advise you if you are undecided whether the GmbH or a GmbH & Co. KG would be the right legal form for you.

5.2 Tax neutral transfer in case of business split

Furthermore, the tax-neutral transfer of assets acc. § 6 Abs. 5 EStG is an advantage. Here, economic goods can be brought into the GmbH & Co. KG after a division of a company, for example a GmbH. These count as special assets of the shareholder and strengthen his participation in the company. Among other things, the shares in the original GmbH can be transferred to the operating assets of GmbH & Co. KG. We are very happy to advise you on this as well as on questions about the procedure for a business split.