Einheits-GmbH & Co. KG has a special structure in which the limited partnership is also the sole shareholder of its own general partner GmbH. Usually it is one or more of the limited partners who are 100% involved in the Komplementär-GmbH. As a rule, Einheits-GmbH & Co. KG has no tax advantage over the normal GmbH & Co. KG. But when it comes to the transfer of the company, then this can be carried out with the Einheits-GmbH & Co. KG even without notarisation. In addition, there are legal peculiarities to be observed when raising the liability capital. Furthermore, it remains to be clarified who is Managing Director of Einheits-GmbH & Co. KG. For a GmbH & Co. KG, this is always the general manager, whose own managing director in turn determines the shareholders’ meeting of the KG. Fortunately, these ouroboros can be dissolved at instances for determining the managing director by means of a trust relationship.

What is a unit GmbH & Co. KG: Structure & Particularities

General information about building a GmbH & Co. KG

1.1 Structure of a limited partnership

In the case of a limited partnership, which is usually abbreviated to KG, we have a partnership in which the liability of the shareholders is different. On the one hand, there is at least one general partner who is liable with all his assets for debts of the KG. Therefore, in German, complementaries are also called full members. On the other hand, at least one shareholder is also involved in a KG. His liability is limited to his contribution to the company assets. This is why they call him a partisan.

1.2. Structure of a GmbH & Co. KG

At a GmbH & Co. KG it is now the case that the general manager is a GmbH. At first glance, it seems quite contradictory that a limited liability company, as its actual designation aptly expressly indicates, assumes the role of a full enforcer in a limited partnership. At second glance, however, we see the great advantage in this constellation. Because this makes it possible for a KG to limit liability overall. In fact, if you like, you even go so far as to grant the GmbH as a general partner a participation of 0 % in the limited partnership, so that the entire profit from the partnership flows to the limited partners. What some people might actually regard as misuse of design even has the blessing of the Bundesfinanzhof. Therefore, this construction is considered completely legal.

2nd establishment of a unit GmbH & Co. KG

Let us now come to the special setup of a Einheits-GmbH & Co. KG. Thus, its structure is characterized by the fact that, unlike normally, instead of a natural person as a GmbH shareholder, the KG itself now holds a 100% stake in the GmbH. It almost seems as if among all forms of company that can be founded in Germany, it is the GmbH & Co. KG, which wants to stand out through paradoxes. Because of this special construction, the KG is involved in the GmbH, which is also involved in itself. For this reason, in these observations on Einheits-GmbH & Co. KG, one may think that this endless chain of mutual relations of participation and domination is most likely to be compared with the symbol of the mythical ouroboros, i.e. the self-devouring snake.

On the question of whether this construction also has legal validity, it must be answered clearly with a yes. In fact, this is also codified by law in § 172 paragraph 6 of the HGB and confirmed by a judge's judgment (BayObLG, 08.04.1974 – 2Z 67/73).

In order to establish a Einheits-GmbH & Co. KG, it is first necessary to establish the future General Ltd. Subsequently, a limited partner can conclude the partnership agreement with this GmbH. However, it is important to design the special structure precisely in terms of social contract. For this you should definitely consult a lawyer experienced in company law.

4th advantages of Einheits-GmbH & Co. KG

Advantage 1: Transfer of Einheits-GmbH & Co. KG without notarisation

Next we look at the advantages of Einheits-GmbH & Co. KG. To start with, they are not taxable. As a partnership, Einheits-GmbH & Co. KG follows the same principles for taxation as for ordinary GmbH & Co. KG. But if you want to transfer an ordinary GmbH & Co. KG, for example by conversion, donation or sale, then in addition to the KG also the general partner GmbH is legally affected. Thus, one must meet formal requirements during the transfer of the GmbH. In other words, you then have to call in a notary who will notarize the transfer of the GmbH.

However, this is irrelevant for a Einheits-GmbH & Co. KG. Because the KG holds a 100 % stake in Komplementär-GmbH, the GmbH will also be transferred to the new owner in the largely informal transfer of the KG. This saves considerable effort in the transfer of Einheits-GmbH & Co. KG.

4.2. Advantage 2: permanent maintenance of Einheits-GmbH & Co. KG

Basically, the second major advantage of Einheits-GmbH & Co. KG is already implicitly embedded in the explanation of its structure. The fact that Komplementär-GmbH is not a shareholder independent of control by the limited partnership means that the limited partnership cannot be dissolved by the GmbH losing its function as a general partner. Thus, Einheits-GmbH & Co. KG also exists if there is a change of shareholder. That is why Einheits-GmbH & Co. KG has fully deserved its name: it forms a real entity from GmbH and KG.

Commercial stamping: advantages, disadvantages, avoidance

5. special features of Einheits-GmbH & Co. KG

So far we have already got to know the most important features and advantages of Einheits-GmbH & Co. KG. So now is the time to look at their legal implications.

5.1 Clarification on the liability relationships within Einheits-GmbH & Co. KG

5.1.1. Can the shares of the GmbH be transferred to Einheits-GmbH & Co. KG as a limited partnership contribution?

First of all, we focus our attention on the important question of the liability relationships of Einheits-GmbH & Co. KG. If the limited partnership is the sole shareholder of Komplementär-GmbH and the GmbH itself assumes full liability, then this naturally also affects the limited partnership in the event of liability. Although the limited partners are still only involved as shareholders in this limited partnership, in principle they have to assume only a limited share of liability (ideally 0 %), the full liability is to be seen quite ambivalently by the mutual participation relationship between the limited partnership and the GmbH. After all, a limited partner could first found the GmbH and then contribute his shares in the same GmbH as a limited partnership for the foundation of the limited partnership there.

But it is precisely against this that § 172 paragraph 6 HGB is protected. This stipulates that in such a handling the limited partnership contribution in the form of the GmbH shares is not recognised. The consequence of this is that a creditor of Einheits-GmbH & Co. KG can invoke a limited partner for personal liability on the basis of this legal standard.

However, it is the essence of a Einheits-GmbH & Co. KG that it is the sole participant of its own complementary GmbH. Therefore, there must be another way by which the GmbH can be transferred to Einheits-GmbH & Co. KG.

5.1.2. Legally correct transfer of the GmbH shares to Einheits-GmbH & Co. KG

For this purpose, the limited partnership transfers money in the amount of the share capital of the GmbH as a limited partnership contribution to the limited partnership. Next, with this money, the KG acquires the shares in Komplementär-GmbH from its limited partner. Only then will the legal transfer of the GmbH shares to the KG take place.

5.2. Determination of the management within Einheits-GmbH & Co. KG

5.2.1 Mutual control of GmbH and KG within Einheits-GmbH & Co. KG

Similar to the question of mutual participation within Einheits-GmbH & Co. KG, the determination of the management can hardly be untangled at first glance. On the one hand, Komplementär-GmbH is solely entitled to determine the management of Einheits-GmbH & Co. KG. On the other hand, as a legal entity, Komplementär-GmbH also needs a managing director. And it is only the shareholders meeting of the KG. Since the limited partnership holds 100% of the shares in the GmbH, it therefore also has all voting rights.

In general, we find that no ordinary shareholders’ meeting can take place in the two companies in the conventional way. Consequently, neither the appointment of a managing director of Komplementär-GmbH nor that of Einheits-KG is directly possible.

5.2.2. Integration of mutual control relations at Einheits-GmbH & Co. KG

Normally one should expect in such a paradoxical situation that this calls into question the existence of Einheits-GmbH & Co. KG from the outset. Fortunately, there is a legal trick with which you can break this endless chain. For this purpose, it is agreed in the limited partnership’s social contract that the exercise of voting rights is the responsibility of the limited partner. Of course, this has a fiduciary character. But at least in a constellation in which only one of all the partners involved is a natural person, namely the limited partner, this condition should be easily fulfilled.

Concluding remarks on Einheits-GmbH & Co. KG

So as you can see, Einheits-GmbH & Co. KG offers some extraordinary features and advantages. However, the handling of current financial accounting and the taxation of a Einheits-GmbH & Co. KG is quite demanding. Therefore, you are certainly well advised with an experienced team of lawyers and tax consultants at your side. We are also happy to offer you our expertise. We invite you to ask us your questions about Einheits-GmbH & Co. KG. So make an appointment with us. We are happy to advise and look after you here.

Lawyers for Company Law

GmbH & Co. KG