KGaA

KGaA stands for Kommanditgesellschaft auf Aktien, a hybrid corporate form used primarily in Germany and other German-speaking countries. It combines elements of a partnership with a stock corporation. The structure has two classes of stakeholders: general partners (Komplementäre) who run the business and carry unlimited liability, and limited partners (Kommanditaktionäre) who hold shares and have liability limited to their capital contribution.

Management is typically carried out by the general partner. In practice, many KGaAs appoint a GmbH as the general partner (GmbH & Co. KGaA) to limit the liability of the managing entity. A supervisory board elected by the shareholders oversees the management, while the general partner retains day-to-day control.

Liability: Kommanditaktionäre are liable only up to their shareholding. The general partner’s unlimited liability applies to individuals who are partners; when a GmbH acts as the general partner, the liability is that of the GmbH.

Legal framework: KGaAs are governed by the German Aktiengesetz (AktG) for stock features and the Handelsgesetzbuch (HGB) for partnership considerations. They operate under a two-tier governance system with a management board and a supervisory board.

Use and characteristics: The KGaA enables raising capital from public or private investors while allowing a controlling party, typically a family or closely held group, to retain control via the general partner. It is favored by some family businesses and large enterprises seeking equity financing without ceding control; however, its structure can be more complex and costly to administer than a pure AG or GmbH.