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Definition of a partnership limited by shares
The limited partnership on shares (KGaA) is a legal person with at least one personally liable partner who runs the company. The other shareholders participate as limited partners with contributions to the capital, which is divided into shares, without being liable with their private assets. The KGaA is a hybrid between the AG and the KG. The legal bases are §§ 278-290 AktG and §§ 161-177 HGB. The KGaA can use the Capital market a large amount of money can be raised.
Foundation of a KGaA
To found a KGaA, one or more founders are required, at least one of whom must be a personally liable partner. The minimum capital is € 50,000. The KGaA is entered in the commercial register. The company can be a personal, material, fantasy or mixed company and must contain the addition of a limited partnership based on shares or KGaA. The KGaA can be dissolved through the termination of a personally liable partner and the resolution of the general meeting.
The following applies to the shareholders:
The rights of management and representation lie solely with the personally liable partner, who is a born member of the board. The profit for limited partners is distributed according to the ratio of the nominal share amounts.
Limited Partnership Obligations
The duties consist primarily of liability. While the personally liable partners have unlimited liability like in a KG, the liability of the limited partners is limited to the contribution like in an AG.
The KGaA causes relatively high capital costs. Their construction is complicated. For these reasons, it has only gained limited importance in practice.