Accounting and reporting

Financial statements have to be prepared under the German
Commercial Code (Handelsgesetzbuch – HGB).

Most of the
provisions can be found in the third book (§ 238 – 342e) of
the German Commercial Code, which contains regulations to
be complied with by all businesses as well as supplementary
regulations for incorporated companies, banks, and insurance
companies. The supplementary regulations designed for incorpo-
rated companies (Aktiengesellschaften – AG) also apply to gen-
eral partnerships (Offene Handelsgesellschaften – OHG) and to
limited partnerships (Kommanditgesellschaften – KG) where no
individual is personally liable (known as “KapCoGesellschaften”).
In Germany, this applies particularly to the form of limited part-
nership known as the “GmbH&Co. KG”, which has a limited lia-
bility company (Gesellschaft mit beschränkter Haftung – GmbH)
as general partner and individuals – typically the members of the
GmbH – as limited partners.

The current rules are fundamentally based on the German
Accounting and Reporting Act (Bilanzrichtliniengesetz – BiRiLiG),
which was enacted in December 1985 to implement the 4th,
7th, and 8th EU Directives into German law.