Limited partnership
What is a limited partnership?
A limited partnership (KG) is a company operating under its own name, in which the liability of some of the partners (limited partners) towards the company’s creditors is limited to a specific amount (limit of liability), whilst for the other group (general partners) it is unlimited. This distinguishes it from a general partnership (OG), in which none of the partners has limited liability towards the partnership’s creditors. Both have legal capacity and are therefore also subject to insolvency proceedings.
What are limited partner contributions and liability limits?
The term ‘limited partner’s contribution’ refers to the contribution to be made by the limited partner as agreed. It relates to the internal relationship with the partnership, whereas, in relation to third parties, the liability amount to be entered in the commercial register specifies the amount to which the limited partner’s liability towards the partnership’s creditors is limited. From a tax perspective, the partners in a limited partnership are regarded as co-entrepreneurs. This classification means that the limited partner’s liability for local taxes arising from a business operated by the limited partnership is not limited by the liability amount.
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