Legal challenges for commercial partnerships
A contribution by attorney Christian Mattlage
Our specialist lawyers for commercial and corporate law as well as our experts for tax law that are involved in the transfer of limited partners' shares to GmbH & Co. KGs are frequently confronted with issues that require special attention, particularly with regard to tax issues. In the following we would like to give you an overview.
Special business assets of the entrepreneur
In contrast to the sale of GmbH shares, the transfer of limited partner's shares of the GmbH & Co KG must ensure that the so-called special business assets are also recognized as part of the intended transaction.
In the context of commercial partnerships it is not unusual that certain assets, which are necessary for the operation of the enterprise, are owned by the entrepreneur. These are so-called special business assets, which are partly recorded in the balance sheet, but often also not taken into account for accounting purposes. Examples of special business assets can be business real estate property held in the private ownership of the entrepreneur as well as trademark rights. From the point of view of the buyer of limited partnership shares, it is therefore of great importance to identify all assets of the special business assets and to acquire them within the scope of the transaction.
Trade tax - Transfers of limited partner shares during the year
Within the scope of the tax assessment at the level of the limited partner, trade tax paid at the level of the KG is usually credited. In practice, the problem often arises that in the case of the sale of limited partnership shares during the year and the participation of the leaving limited partner in the profits of the current year, a corresponding offsetting against trade tax paid at the level of the KG is problematic.
The background to this problem is that a crediting is only possible if the limited partner is still a partner at the end of the fiscal year. If a withdrawal of the limited partner during the course of the year is to take place under consideration of profits of the current fiscal year, this requires at least some creative considerations.
Recommendations by the lawyer for german law practice
From the point of view of the consulting practice, trade tax problems with regard to the sale of a limited partner's share during the year can be solved, for example, by the fact that with the completion of the transaction the general partner GmbH also leaves the limited partnership and the business of the KG increases with the buyer of the limited partner's share. At the same time, this leads to the termination of the limited partnership and allows the unrestricted credit of the trade tax at the level of the leaving limited partner.
In view of the special tax issues involved in the sale of limited partnership shares, we advise our clients to identify tax problem areas in connection with the GmbH & Co KG as early as possible and to develop solution concepts together with our lawyers for commercial and corporate law and our tax experts.