[ESTABLISHING A BUSINESS ENTITY IN GERMANY]
210
management of changes within the partner structure, particularly regarding the entry and exit of partners and the process during insolvency. A KG is established when a partnership agreement between two or more partners (including at least one limited and one unlimited partner) is concluded. It is advisable for the partnership agreement to be made in writing. The updated provisions offer increased flexibility in partnership agreements, enhancing the structure's adaptability to diverse business needs. The liability of the limited partner will only become limited once the registration of the KG and the subscribed partnership contribution has been entered in the commercial register (which is obligatory). The application to the commercial register must be made by all partners and be certified and filed by a notary. The costs for registration vary, but are about EUR 400. A KG must then be registered with the local trade office. Fees for legal counsel are not included. g. GmbH & Co. KG The GmbH & Co.KG is a limited partnership (KG) in which the general partner (Komplementär) is a limited liability company (GmbH). The GmbH is fully liable for the GmbH & Co. KG's debts and liabilities. The liability of the limited partners (Kommanditisten) is limited to their respective share of the partnership capital. This hybrid form is suitable for entrepreneurs wishing to limit their liability while enjoying the flexibility of a non- incorporated business. Because of its flexibility, the legal form GmbH & Co. KG is especially appropriate for medium-sized businesses and family companies.
The GmbH & Co. KG is established through conclusion of a partnership agreement between the general partner and the limited partners (advisably in writing). Typically, the shareholders of the general partner (GmbH) are identical to the limited partners of the KG. In line with the registration formalities of the KG, the GmbH & Co KG must be entered in the commercial register and registered with the local trade office. The liability of the limited partner will become limited once the KG and the subscribed partnership contribution are registered in the commercial register. The application to the commercial register must be made by all partners and be certified and submitted by a notary. The costs for registration in the commercial register vary, but are about EUR 400. Fees for legal counsel are not included. h. Branch Offices Any foreign company with a head office and registered business operations outside of Germany can establish a German branch office. A branch office is a suitable business form for a foreign company wanting to establish a presence in Germany for the purpose of initiating business and maintaining contacts with business partners. In Germany, there are two kinds of branch establishments which primarily differ due to the degree of the independence from the head office company: - Autonomous Branch Office - Dependent Branch Office aa. Main Characteristics A branch office has no independent or separate legal personality distinct from the head office itself. In legal and organizational terms, it is part of the
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator