The main feature of a partnership is the personal commitment of the partners to their working efforts to the partnership. Any partnership requires at least two partners. There are four major forms of partnerships in Germany.
Their main difference lies in the liability of their partners and required registration obligations.
A partnership company (Partnergesellschaft or PartG) is a form of partnership specifically designed for the joint exercising of professional freelance activities, such as architects. This company form is not further explained on the following pages. Please contact us if you have questions concerning the establishment of a partnership company. For contact information please refer to the link on the right.
In contrast to corporations, partnerships are not independent legal entities but associations of people. In partnerships, the individual partners responsible for the liabilites of the company (including private assets) act for the company. Limitations of liability for individual partners are only possible to a limited extent.
No minimum share capital is required , and the accounting obligations and publication requirements are less extensive than those for corporations.
Establishment of a Partnership
Establishing a partnership is easy and can be completed in just a few steps. At least two partners are required to establish a company. A minimum share capital does not have to be raised. The management of the company can only be carried out by partners.
Depending on the type of partnership, entry in the commercial register (Handelsregister) is required. The application is signed by all partners and must be filed by a German notary in certified and electronic form with the commercial register. If a business activity is carried out by the partnership, the trade office (Gewerbe-/Ordnungsamt) must accordingly be notified.
Please read more on business registration here:
Taxation of a Partnership
The partnership itself is not taxed (as is the case with corporations), but the individual partners. The taxable profit is determined at the level of the company and allocated to the partners according to their shares. The partnership itself is only subject to trade tax.
The different kinds of partnerships differ primarily in terms of the contingent liabilities of the partners and the necessary registration obligations.
The average tax burden on companies is less than 30 percent. In some regions of Germany, due to a locally variable rate of trade tax, it is under 23 percent. The tax rate to which a partner of a partnership is subject can be optionally adjusted to the tax rate of corporations.
Forms of Partnerships: Overview
Minimum Number of Partners
Minimum Share Capital
Civil Law Partnership (GbR)
Personal unlimited liability
General Commercial Partnership (oHG)
Personal unlimited liability
Limited Partnership (KG)
Two partners: general partner and limited partner
General partner: personal unlimited liability Limited partner: limited share liability
GmbH & Co. KG
Two partners: general partner (GmbH) and limited partner (the general partner is typically the limited partner of the KG)
General partner (GmbH): personal unlimited liability Limited partner: limited share liability