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Notification obligations towards the transparency register for German Limited partnerships 

The obligation to notify the transparency register of the beneficial owners of companies is very broad, in particular for German Limited partnerships (Kommanditgesellschaften) and companies with foreign shareholders. Circumventions of this notification obligation, for example by registration of the German branch offices in the commercial register, are nearly impossible.

Starting point: Obligation to report the beneficial owners to the transparency register

Since the end of 2017, the beneficial owners of almost all types of German companies and – since 2020 – as well of foreign companies that acquire real estate in Germany have to be entered in the transparency register. Simply spoken, the beneficial owner is the natural person who directly or indirectly holds more than 25% of the shares or voting rights in a company or controls it in a corresponding manner. Generally, some personal data of these beneficial owners (e.g. name, date of birth, place of residence) and  information on the type and scope of their beneficial ownership must be reported to the transparency register. There is only one exception from the notification obligation: If the necessary information can completely be derived from German (!) public registers (e.g. the Federal Gazette, the commercial or company register), a separate notification to the transparency register is not be necessary (so called fiction of notification). This is particularly helpful for GmbHs whose shareholder list is up to date and electronically registered in the commercial register.

Exemption from the notification obligation for limited partnerships only in exceptional cases

In the case of Limited partnerships, the responsible Federal Administrative Office has an extremely strict legal opinion which has the effect that the notification obligation does generally apply to nearly all Limited partnerships. Other than for GmbHs, the fiction of notification does respectively apply to limited partnerships only in some exceptional cases (especially in the case of one-person limited partnerships or if there is no or only the general partner as beneficial owner). 

Difficulties in case of the involvement of foreign shareholders

In any case, i.e. even if the fiction of notification exceptionally applies for the Limited partnership or if a GmbH is concerned, further practical difficulties may arise as soon as foreign companies are involved as shareholders of German companies. As the fiction of notification does only apply for German public registers the fiction is “cut off” as soon as the beneficial owner of the German company is involved over a foreign company. Even if the information on the foreign company’s beneficial owners (shareholders, managing directors, etc.) could be derived from foreign registers, the fiction of  notification will then no longer apply and the notification obligation towards the transparency then remains in force.

Advice: Careful assessment of notification obligations towards the transparency register in particular for Limited partnerships and / or companies with foreign shareholders

Limited partnerships as well as German companies with foreign shareholders therefore need to assess very carefully whether they have notification obligations or not. This applies in particular as in the previous months the competent authorities have started to impose relevant fines to the companies that to not comply with their notification obligations towards the transparency register. Circumventions are nearly impossible what a decision of the Higher Regional Court of Braunschweig as of 18 March 2020 (file no. 3 W 4/20) has shown impressively in the younger past. There, a Dutch limited liability company (short: B.V.), which was registered in the Dutch commercial register, was the general partner of a German Limited partnership. The Limited partnership wanted to avoid a notification of its beneficial owners to the transparency register it tried to amend its entry in the commercial register instead in the regard that besides the B.V. the German branch office of the B.V. should be mentioned as general partner of the Limited partnership. This attempt was rejected from the commercial register and later of the Higher Regional Court of Braunschweig as well for various reasons. The decision thereby showed clearly that the notification obligations towards the transparency register are no marginal phenomena under money laundering law, but that they can become relevant in a variety of constellations under corporate law and should therefore always be considers especially by Limited partnerships and / or other companies with foreign shareholders.

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