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UG & Co. KG at a fixed price
With Recht 24/7 you can set up your UG & Co. KG quickly and easily online. Directly from a lawyer and with no hidden costs. We have been helping founders to get their company off to a legally secure and bureaucracy-free start since 2003.
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UG & Co. KG online: What you need to know
Low formation costs, tax advantages and limited liability: the UG & Co. KG is an interesting alternative to the conventional UG for many founders. But what exactly makes a UG & Co. KG so attractive? What are the advantages and how can you set up a UG & Co. KG online?
UG & Co. KG online: What is a UG & Co. KG?
You may be familiar with the addition "Co. KG" from a GmbH & Co. KG. We have described this type of company in detail in our article "Founding a company: the GmbH & Co. KG".nullThe abbreviation "Co. KG" stands for "Compagnie Kommanditgesellschaft". This legal form is one of the partnerships and is made up of two types of partners, namely:
- partners with unlimited liability - also with their private assets (general partners)
- only with their capital contribution and thus limited partners (limited partners)
With a UG & Co. KG, a business company (UG for short) assumes the role of the personally liable partner. The advantage: As the shareholders of a UG are only liable with their private assets in exceptional cases - e.g. in the event of gross violations of the law - the UG & Co. KG is extended by an additional limitation of liability.
UG & Co. KG: The difference to a UG
| Criteria | UG | UG & Co. KG |
| Legal form | Corporation | Partnership |
| Liability | Limited to the company's assets | The general partner (the UG) is only liable with the assets of the UG, limited partners are liable with their contribution |
| Social contract | Model protocol or articles of association, notarization required | Articles of association for the KG, model protocol or articles of association for the UG, each requiring notarization |
| Commercial register entry | HRB (as a corporation) | HRB (UG as a corporation), HRA (UG & Co. KG as a partnership) |
| Trade tax | Trade tax liability | Tax allowance of EUR 24,500/year, trade tax can be credited against the limited partners' income tax |
| Accumulation of reserves | Obligation to carry forward a quarter of the net profit for the year less the loss carried forward from the previous year | No obligation |
Legal form
UG: corporationnullUG & Co. KG: Partnership
Liability
UG: Limited to the company's assetsnullUG & Co. KG: General partner (the UG) is only liable with the assets of the UG, limited partners are liable with their contribution
Social contract
UG: model protocol or articles of association, notarization requirednullUG & Co. KG: Articles of association for the KG, sample protocol or articles of association for the UG, each requiring notarization
Commercial register entry
UG: HRB (as a corporation)nullUG & Co. KG: HRB (UG as a corporation), HRA (UG & Co. KG as a partnership)
Accumulation of reserves
UG: Obligation to carry forward a quarter of the annual net profit less the loss carried forward from the previous yearnullUG & Co. KG: No obligation
The advantages of a UG & Co. KG at a glance
- Low minimum start-up capital: While a share capital of at least EUR 25,000 is required for the company formation of a GmbH, you only need EUR 1 to set up a UG & Co. KG.
- Limited liability: The company formation of a UG & Co. KG, you as the founder retain the advantage of the UG as a legal form with limited liability.
Tax advantages: As a partnership, the UG & Co. KG - like a sole proprietor - benefits from the annual trade tax allowance of EUR 24,500. In addition, a UG & Co. KG does not have to pay income or corporation tax. Only the shareholders of the KG are liable for income tax. - Simplified capital procurement: With a UG & Co. KG, you can quickly increase its capital. All you have to do is add investors as limited partners.
Who is liable for a UG & Co. KG?
The UG acts as the general partner within the KG structure. Although the KG has unlimited liability in principle, this is only due to its corporate form. This means that the liability of the KG partners (as limited partners of the UG & Co. KG) is limited to their capital contribution.nullThe amount of the capital contribution is based on a fixed amount to be entered in the commercial register. If a limited partner founds a partnership without being entered in the commercial register, he is personally liable without limitation for all liabilities of this partnership.
How does the accounting of a UG & Co. KG?
A UG & Co. KG is subject to double-entry bookkeeping. This is because the legal form consists of two companies. Consequently, two independent books must be kept and two separate balance sheets and annual financial statements must be prepared - one for the UG and one for the KG.nullHowever, if the UG is the sole general partner of the UG & Co. KG, the additional expense is low in practice.
For whom is it worth setting up a UG & Co. KG be founded?
Due to its limited liability and simplified capital procurement, the UG & Co. KG is particularly interesting for founders who want to act as the sole boss but with the involvement of investors. In addition, the UG & Co. KG is also suitable for founders who wish to appoint friends or family members as non-liable shareholders.
Who will take over the management?
A UG & Co. KG is represented externally by the general partner (i.e. the UG). The managing director of the UG is usually also responsible for the management of the UG & Co. KG. Limited partners are excluded from the management except for their right of objection, power of attorney or any powers of attorney. However, they can exercise their right to vote on extraordinary decisions.
UG & Co. KG can be founded: How does the company formation of a UG & Co. KG?
If the UG (as the subsequent general partner of the KG) and the KG itself have not yet been founded, the company formation of a UG & CO. KG consists of the following steps:
Step 1: company formation of the UG
Our article "The UG in Germany - a success story" explains how a UG is formed in detail. The company formation a UG can be done very easily with the help of a sample protocol. Once the share capital has been paid into the business account, the notary makes the corresponding entry in the commercial register.
Step 2: company formation of the KG
The KG is founded by the conclusion of a partnership agreement between the partners involved. Once the KG share capital has been paid into the business account, the notary makes the entry in the commercial register. This is followed by the entry in the transparency register, registration with the trade office and the tax office.nullYou can find more information on the transparency register in our blog post "Transparency register: What is changing and what needs to be considered?".
Step 3: company formation of the UG & Co. KG
Even for the actual company formation of the UG & Co. KG also requires a partnership agreement. This is concluded between the UG as the general partner and the KG as the limited partner.nullAfter concluding the contract, you open the business account of the UG & Co. KG and pay in the share capital. As soon as your notary has received the payment receipt, he will make the entry in the commercial register. Your company will then receive a commercial register number to register with the trade office.
Questions and answers about UG & Co. KG company formation
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The notary fees are as follows if the model protocol is used and the share capital is up to EUR 7,000:
- for one shareholder approx. 190.00 EURO
- for 2-3 partners approx. 290,00 EURO
or the notary fees if individual articles of association are used, as with a GmbH:
- for one shareholder approx. 800.00 EURO
- with more shareholders approx. 860.00 EURO
Additionally for the notarization of the commercial register application of the KG approx. 150,00 EUROnullThe notary will invoice the new company after notarization.nullThe costs of the registry court for the registration amount to approx. 300.00 euros for the UG (haftungsbeschränkt) and will be invoiced to the new company approx. 10 days after notarization. The costs are made up of approx. 225.00 euros for the entry and approx. 75.00 euros for retrieving the documents.nullThe costs for registering the KG in the commercial register amount to approx. 200.00 EURO - consisting of registration (approx. 150.00 EURO) and provision for retrieval (approx. 50.00 EURO).nullThese fees will be invoiced to the new company approximately 10 days after notarization.
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