Kommanditgesellschaften

Kommanditgesellschaft, abbreviated KG, is a type of business entity used in several European jurisdictions that combines features of a partnership and a corporation. It has two classes of partners: general partners (Komplementäre) who manage the business and have unlimited personal liability, and limited partners (Kommanditisten) whose liability is limited to their capital contribution. General partners bear the day-to-day responsibility for binding the entity, while limited partners typically contribute capital and are not involved in routine management, except under defined conditions.

Formation and governance are based on a partnership agreement that sets capital contributions, profit distribution, management rights, and rules for transfer of interests. The KG is usually formed through a contract and registered in the local commercial register. In many systems, profits and losses pass through to the partners for tax purposes, so the entity itself is not taxed as an independent unit; partners are taxed according to their share of the income, at rates that depend on their status as individuals or corporate entities.

Variants and equivalents exist under different names in other countries. German-speaking regions use Kommanditgesellschaft; Denmark uses kommanditselskab; Sweden and Norway have kommanditbolag or kommandittselskap; the Netherlands uses a commanditaire vennootschap. Despite terminology differences, these forms share the core structure: a hybrid between a partnership and a capital-raising vehicle, enabling limited liability for passive investors while allowing active partners to manage the enterprise.

Advantages include easier access to external capital and limited liability for passive investors, alongside flexible profit distribution. Disadvantages include the unlimited liability of general partners, more complex governance than a simple partnership, and regulatory or tax considerations that vary by country.