Section 166 UGB gives a limited partner information and inspection rights. A KG agreement can define and extend reports, records and procedures.
A limited partner’s control right begins with the statutory entitlement to a copy of the annual financial statements or, where there is no accounting obligation, another account. Under section 166 UGB, the limited partner may inspect the books and records to check the accuracy of that document. Where important reasons exist, the court may also order a balance sheet, further explanations or the production of books and records.
The KG agreement should therefore state which reports and supporting documents are provided regularly, how an inspection request is handled and how the information may be used. The control right provides access to economically relevant records. It does not by itself make the limited partner a managing partner or give a general decision-making power.
Choose the current issue. The result identifies which part of the statutory right or agreement clause should be reviewed first.
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Record the statutory minimum and add precisely the reports and records needed to monitor the KG. The article on loss allocation in an OG shows a related situation in which the agreement and economic basis must be reviewed together.
Arrange the annual financial statements, the request and any follow-up questions in chronological order. Then review which inspection of books and records is needed to check the reported figures.
Identify the account that makes the KG’s economic position understandable. The question of books and records should then relate to checking that document.
Describe the books and records as precisely as possible and state which figures they are meant to verify. The article on prokura in an OG concerns another partnership but also illustrates why authority and evidence should be clearly assigned.
Preserve the account, request, response or silence and the reasons why further clarification is needed. Section 166 subsection 3 UGB refers to a court order for a balance sheet, other explanations or the production of books and records.
Section 166 subsection 1 UGB gives the limited partner the right to request a copy of the annual financial statements. If the Third Book of the UGB does not require accounts, another account takes its place. The limited partner may inspect the books and records to check the accuracy of the document provided.
The provision connects three elements: delivery of the account, inspection to check its accuracy and court assistance where important reasons exist. Under section 166 subsection 3 UGB, the court may order a balance sheet or other explanations and the production of books and records at any time where important reasons exist. The agreement should reflect this statutory structure.
The copy of the annual financial statements or the other account is the first object of review. Inspection of books and records connects to it by making the figures understandable. A request should therefore identify the relevant item, period and supporting records where possible.
Information and inspection serve different functions. An account presents the position in summary. Books and records allow the underlying transactions to be checked. Further explanations can clarify an open connection. A blanket request for every document makes the practical scope unclear and leaves the review purpose undefined.
The KG agreement can supplement the statutory minimum with defined reporting duties. These may include interim management accounts, liquidity overviews, budget versus actual comparisons or an organised list of material transactions. The clause should describe the content and delivery method so that the parties understand the same scope of review.
For inspection, the agreement should address frequency, notice, location or digital access, permitted copies and assistance by a professionally bound adviser. It should also clarify costs, protection of confidential information, personal data and the response to identified discrepancies. An extension becomes workable when it has a reliable procedure.
Section 166 subsection 2 UGB states that the further rights granted under section 118 UGB to a partner excluded from management do not apply to a limited partner. The limited partner’s statutory control right must therefore be kept separate from general participation in management.
A contractual extension should state whether it concerns a report, inspection, explanation or consent to a defined measure. Checking figures and records does not by itself create an ongoing decision-making power. The control clause and the management rules should remain separately understandable in the partnership agreement.
If an account, inspection or explanation is refused, the limited partner should document the request and its purpose. The record should identify the document, period, unresolved issue and the KG’s response. This chronology provides a sound basis for the next legal assessment.
Section 166 subsection 3 UGB provides for a court order where important reasons exist. The court may order delivery of a balance sheet or other explanations and the production of books and records at any time. Whether an important reason exists depends on the information deficit and its significance in the particular situation. The agreement may organise the internal request, but it does not remove that statutory requirement.
A drafting or review exercise needs the current KG agreement and amendments, the agreed accounts, annual financial statements or other reports, a current Firmenbuch extract and the previous correspondence. An extended clause also calls for the report templates, agreed data-room access and records of earlier inspection requests.
A useful clause answers five questions: What is reported, when is it provided, what inspection is available, how are questions answered and how is confidentiality protected? For a specific matter, the account, records, request and response should form one traceable file. New articles and legal updates are available through BRANDaktuelle Rechtsnews.
The limited partner may request a copy of the annual financial statements. If there is no accounting obligation, another account takes its place. The accuracy may be checked by inspecting books and records.
Section 166 UGB provides for delivery of an account and inspection to check its accuracy. The request should therefore identify the review subject and the books or records needed for that purpose.
The agreement can provide for additional reports, records and a more detailed procedure. Frequency, subject matter, access, costs and confidentiality should be stated expressly.
No. Reviewing accounts, books and records does not by itself create ongoing management authority. The two areas should be kept separate in the agreement.
Where important reasons exist, the court may order under section 166 subsection 3 UGB that a balance sheet or other explanations be provided and that books and records be produced. The request and response should be documented carefully.
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