The partnership may, under certain circumstances, represent a sensible alternative to the joint-stock company. The provisions of § 34a Income Tax Act make it possible for a partnership’s retained or undistributed earnings to be treated from a taxation perspective in a manner comparable to the approach applied in the case of the joint-stock company.
This makes for significant tax relief. If, for example, we are talking about limited partnership with a private limited company acting in the capacity of general partner (GmbH & Co. KG), the legal benefits for the joint stock company under liability law pass to the partnership. This, however, highlights just how imperative it is that the partnership receives a qualified advisory service of a standard that is fully compliant with requirements under taxation legislation.