Limited Partnership Agreement Private Equity Template for Germany

A Limited Partnership Agreement Private Equity creates the legal foundation for establishing and operating private equity funds in Germany using the Kommanditgesellschaft (KG) structure. This agreement defines the relationship between General Partners (Komplementäre), who manage the fund and bear unlimited liability, and Limited Partners (Kommanditisten), who provide capital but enjoy liability protection limited to their contributions. You need this comprehensive document to ensure your PE fund operates within German legal requirements while attracting both domestic and international investors.

When do you need this document?

You require this agreement when establishing a new private equity fund in Germany, particularly if you're targeting institutional investors such as pension funds, insurance companies, or family offices. The document becomes essential when structuring fund vehicles that need to comply with both German Commercial Code requirements and EU AIFMD regulations. You'll also need this agreement when converting existing investment structures to German KG format or when establishing feeder funds that invest into German PE vehicles. Additionally, this document is crucial when your fund strategy involves acquiring German companies or when you need a tax-efficient structure that allows flow-through taxation for international investors.

Key legal considerations

Your agreement must clearly define capital commitment obligations, drawdown procedures, and default consequences under German Commercial Code provisions. The carried interest mechanism requires careful structuring to comply with German tax law and ensure proper allocation between General and Limited Partners. Management fee calculations, expense allocation, and distribution waterfalls must align with both contractual terms and German partnership law requirements. You must address conflicts of interest, co-investment rights, and transfer restrictions that protect fund integrity while respecting partner rights. The agreement should include robust governance provisions covering investment committee decisions, advisory board roles, and information rights that satisfy both German transparency requirements and institutional investor expectations.

Legal requirements in Germany

Under the Handelsgesetzbuch (HGB), your partnership must be registered in the commercial register and comply with specific formation requirements including minimum capital provisions and partner identification. The Kapitalanlagegesetzbuch (KAGB) imposes additional obligations for investment funds, requiring appointment of an AIFM-licensed manager and compliance with risk management, liquidity, and investor protection rules. You must satisfy anti-money laundering requirements under the Geldwäschegesetz (GwG), including beneficial owner identification and ongoing monitoring procedures. The agreement must incorporate AIFMD provisions regarding depositary requirements, valuation procedures, and investor disclosure obligations. Additionally, cross-border tax considerations require careful attention to double taxation treaties and withholding tax implications for international Limited Partners investing through the German KG structure.