The Kommanditgesellschaft (KG): Germany's Limited Partnership

The Kommanditgesellschaft (KG) solves a classic founder problem: one person wants to run the business, others just want to invest. The KG separates these roles cleanly — with a fully liable managing partner and capital providers whose risk is capped at their contribution. No minimum capital, no notarization requirement for the partnership agreement.

What is a KG?

A KG is a German limited partnership with at least two partners in two distinct roles:

• General partner (Komplementär): runs the business, represents the KG externally — and is personally liable without limit
• Limited partner (Kommanditist): contributes capital, is liable only up to their contribution — and is excluded from management

Both roles can be filled by natural or legal persons. If a GmbH takes the general partner role, you get the GmbH & Co. KG — the variant without personal liability.

Forming a KG: the requirements

1. Partnership agreement between at least one general and one limited partner — no formal requirements, but written form is strongly advised. It governs contributions, profit distribution, management, and exits.
2. No minimum capital: the limited partner contribution is freely negotiable.
3. Company name with the suffix "KG" or "Kommanditgesellschaft".
4. Commercial register entry — filed electronically through a notary. Limited partners and their liability amounts become publicly visible there.
5. Trade registration and tax number with the trade office and tax office — details in our tax number guide.

For the commercial register and imprint you need a serviceable business address. You can get one fully digitally from Clevver — including a digital mailbox.

Rights and duties inside the partnership

The general partner decides day-to-day business alone and represents the KG externally.

Limited partners are legally investors: they may inspect the books, receive the annual financial statements, and must consent to extraordinary transactions (e.g. selling the company). The partnership agreement can grant them more rights — but that's not the default.

Profit distribution is governed by the agreement; typical is interest on contributions plus a reasonable split of the remainder.

Advantages of the KG

• No minimum capital — form with any contribution amount
• Fast, informal conclusion of the partnership agreement
• Clear role separation: management with the general partner, capital from the limited partners
• Tax transparency: profits are taxed directly at partner level, no double taxation
• Investor-friendly: capped risk makes participation attractive

Disadvantages of the KG

• Unlimited liability of the general partner — the central risk of this legal form
• Limited partners stay passive: active involvement is legally restricted
• Publicity: contributions appear in the commercial register
• Succession needs clean contractual clauses, otherwise conflicts loom

Who is the KG right for?

• Family businesses: the senior runs the firm as general partner, the next generation invests as limited partners
• Founders with backers who deliberately shouldn't co-decide
• Joint ventures with clearly divided roles

As soon as the general partner's personal liability is not acceptable: choose the GmbH & Co. KG. All alternatives are covered in our company types overview.

FAQ

How many partners does a KG need at minimum? Two: one general partner and one limited partner.

What is the limited partner liable with? Only with the liability amount registered in the commercial register. Once the contribution is fully paid in, personal liability is excluded.

How is a KG taxed? As a partnership: profits are attributed proportionally to the partners and taxed at their personal income tax rate. The KG itself pays trade tax.

Can a limited partner become managing director? Not as a limited partner — management sits with the general partner. The agreement can, however, grant them commercial power of attorney (Prokura).