Besides GmbHs and Ags, commercial partnerships (as defined
by the German Commercial Code) play an important role in
Germany’s business life. Such partnerships include general
partnerships (Offene Handelsgesellschaft – OHG) and limited
partnerships (Kommanditgesellschaft – KG). The only major
difference between the two forms is the liability of partners.
In an OHG, all partners are jointly and severally liable for all of
the partnership’s debts.
In a KG, at least one general partner
(Komplementär) is personally liable, whereas the liability of the
limited partners (Kommanditisten) is limited to their registered
contribution to the partnership. For this reason, foreign investors
usually choose a KG when setting up a partnership structure for
their investment in Germany.