Commercial and tax compliance as well as regulatory aspects for private equity funds

Ongoing compliance tasks under commercial and tax law, as well as the innovations and changes introduced by the German Investment Code (Kapitalanlagegesetzbuch - KAGB), keep domestic and, where relevant, foreign private equity funds busy in their daily work. For this reason, we have again chosen selected aspects from the various compliance areas this year, which we discuss in more detail below.

In the first part of the paper, aspects related to accounting for private equity funds are presented, and in the second part, important areas of substantive and formal tax compliance are presented. In detail, the topics of separate and uniform declarations (for domestic and foreign private equity funds), the reporting of foreign shareholdings in accordance with Section 138 of the German Fiscal Code (AO) and the (new) regulation on the return of capital contributions for foreign corporations are touched upon. Selected regulatory topics, such as the newly introduced BaFin notification under the KAGB, the initial/acquisition valuation under KAGB and KARBV, respectively, as well as recent findings on the (alternative) depositary for private equity funds in the third chapter round off this contribution.

Commercial law compliance: accounting

General principles

The obligation to prepare annual financial statements in accordance with the German Commercial Code for a fund company (GmbH & Co. KG) is well known. The existing facilitation options are generally not used in practice.

Although there is no legal obligation to audit the prepared annual financial statements, the annual financial statements are generally audited on the basis of corresponding provisions in the articles of association.