Withdrawal

In corporate law, withdrawals are understood to mean all financial contributions made by a partnership to its shareholders . The term is also used in sole proprietorship when the owner withdraws assets or services from his company for private purposes. The opposite of withdrawal is the deposit .

General

The concept of withdrawals comes from commercial law and was later adopted by tax law , since withdrawals are also tax-relevant processes. Withdrawals are only available from partnerships and sole proprietorships. Corporations have no privacy, the transfer of assets from the business assets of a corporation to the privacy of a shareholder / partner leads to an open or hidden profit distribution .

Commercial law

The concept of extraction is not legally defined under commercial law . Rather, the central regulation of § 122 HGB speaks of the right of the partner to "raise money ... from the company treasury ..." The withdrawal regulations apply to the general partnership , limited partnership and sole proprietorship. The balance sheet equity arises in these legal forms , the balance of capital contributions, withdrawals and the gain or loss of a financial year .

Withdrawals

Withdrawals always reduce equity, but not the company's profit ; they are carried out regularly at the expense of the capital share. Each partner may withdraw company assets from his company - regardless of profit. In Section 122 (2) HGB, however, an upper limit is stipulated, according to which a shareholder may withdraw up to 4% of his variable capital share without the consent of the other, provided that his share of the profit is lower than this upper limit ( Section 122 (1) HGB). Additional shares in profits and all shares in losses are distributed evenly “by head” in accordance with Section 121 (3) HGB and deducted from their capital shares. Section 122 of the HGB also applies to the general partner of the KG according to Section 161 (2) of the German Commercial Code. Insofar as the capital share becomes negative due to withdrawals (or losses), the loss exceeding the capital share on the balance sheet date, analogously to Section 264 (1) sentence 5 HGB in conjunction with Section 268 (3) HGB, is deemed to be a " share of loss not covered by capital contributions of personally liable partners" activate .

Types of extraction

• Withdrawal of profits : The pro rata corporate profit credited to the capital share of the shareholder in accordance with Section 120 (2) of the German Commercial Code (HGB) represents a profit claim of the shareholder, which he can realize through withdrawal.
• Withdrawal of capital : the right to withdraw capital exists regardless of whether the company is in a profit or loss situation. Only shareholders with a positive capital share can withdraw capital.
• Tax withdrawal : The shareholders may withdraw the current taxes due to them for their pro rata profit from the partnership. According to the general opinion, this can be derived from Section 122 (1) Alt. 2 HGB can be derived as profit withdrawal , even if, in the opinion of the BGH, “the law does not recognize any right to withdraw taxes in addition to the claim from § 122 HGB”. The tax withdrawal should only cover the company-related taxes, not also the other tax liabilities of the shareholder.
• Private withdrawal: assets withdrawn from the company by shareholders, which are transferred to the private sphere of the shareholder and serve non-business purposes. For example , if the shareholder uses a company car for private purposes, the non-business expenses (gasoline costs) must be deducted from the operating expenses in the income statement and posted as private withdrawals, reducing equity. As a result, it does not reduce the profit, but counts as an anticipated profit payment.

Distribution of profits and losses

The regulations on the distribution of profits and losses can be found for the general partnership in § 120 to § 122 HGB and for the KG in § 167 to § 169 HGB. This distribution takes place in three stages:

• Determination of results : by drawing up and approving the annual financial statements ;
• Result Comparison : by assigning law or social contract to each partner;
• Withdrawal : after the allocation, each shareholder can assert his capital and profit withdrawal rights.

Technically, the extraction is the last process of the profit and loss distribution of a partnership. The distribution of profits is provided - as a mandatory right - in Section 121 of the German Commercial Code. The right to profit from the right to withdrawals must be strictly separated. While the claim to profit relates to the arithmetical allocation of the pro rata profit to the shareholder's share of capital, the right of withdrawal regulates which proportion of capital and profit he can demand for payment. The shareholders are entitled to have their profit attributed to their capital share ( Section 120 (2) HGB).

Shareholder accounts

In the bookkeeping of a company, general ledger accounts are usually set up on which private withdrawals are booked separately and managed as sub- accounts under the balance sheet item equity. According to Sections 120 ff. Of the German Commercial Code (HGB), every partner in a general partnership (and general partners of a KG) has a single variable capital share, the amount of which is determined by withdrawals and contributions ( Section 122 (1) of the German Commercial Code) and through profit and loss shares ( Section 122 (2) HGB) changed. In the case of the GmbH & Co. KG , the GmbH as general partner also has the right to withdrawals in accordance with Section 122 of the German Commercial Code (HGB). In company contracts more clarity is often created by multiple cash accounts are maintained for each partner. In the articles of association, fixed capital accounts are then agreed for each partner, which form the basis for the distribution of profits. These are typically the fixed (fixed) capital account ( capital account I ) and the variable capital account ( capital account II ). While the capital account I expresses the participation in profit and loss, the private withdrawals and private contributions of the shareholder are recorded on the capital account II. Any private accounts are to be shown as outside capital .

Tax law

Withdrawals are regulated and relate to tax law in Section 4 (1) sentence 2 EStG

• the transfer of an asset from a business asset to a private asset or
• the use of company services for non-company purposes.
• The transfer of an asset from a domestic permanent establishment to a foreign permanent establishment is equivalent to a withdrawal ( Section 4 (1), sentences 3 to 5 EStG).

Examples

• Withdrawal of money : An entrepreneur pays food for his private household with the money from the company coffers or transfers his income tax advance payment from the company account.
• Removal of material : An entrepreneur gives his daughter a car belonging to the company's assets for her birthday.
• Withdrawal of use : An entrepreneur uses a car ( company car ) belonging to the company assets for private errands and for going on vacation.
• Withdrawal of services : An entrepreneur has the lawn in the garden of his private property maintained by employees of the company.
• Over- withdrawal : We speak of over- withdrawal if the withdrawals made in a financial year exceed the sum of deposits and profit. The debt interest from this can only be deducted to a limited extent as a business expense ( Section 4 (4a) sentence 2 EStG).

Income tax

Withdrawals reduce business assets and thus equity . When determining profits by comparing business assets , withdrawals must therefore be added to profit ( Section 4 (1) sentence 1 EStG).

The withdrawal of an asset is treated like a delivery for a fee for sales tax purposes ( Section 3 (1b) sentence 1 UStG ). The withdrawal of uses and services is treated like any other service for sales tax purposes ( Section 3 (9a) sentence 1 UStG). See also: Free valuation .

Withdrawal coverage rate

In connection with withdrawals that have been made, there is an economic key figure that indicates the extent to which a company was able to finance the withdrawals of the shareholders with its cash flow :

${\ displaystyle {\ text {Withdrawal coverage}} = {\ frac {\ text {Cashflow}} {\ text {Withdrawals}}}}$

If this withdrawal coverage rate has increased, it is either due to an absolute decrease in withdrawals or to an increased cash flow and vice versa. In any case, the withdrawal coverage rate must be> 1, otherwise the shareholders will withdraw more liquidity from the company than it has generated through the sales process.

Individual evidence

1. a b c Stefan Zagel: Die OHG, KG and PublikumsG , 2004, pp. 237, 249 f.
2. ^ Matthias Habersack / Carsten Schäfer: Das Recht der OHG , 2010, p. 691.
3. BGH, judgment of March 29, 1996, Az. II ZR 263/94, full text = BGHZ 132, 263, 277.
4. Astrid Erker: Compensation for Taxes , 2010, p. 137.
5. Jochen Thiel, Alexander Lüdtke-Handjery: Accounting law: commercial balance sheet , tax balance sheet , 2005, p. 82.
6. Klaus Bertram / Ralph Brinkmann / Harald Kessler / Stefan Müller: Haufe HGB Balance Sheet Comment , 2013, p. 215.
7. Klaus von Safe: Income Tax Volume 1 , 2005, p. 72.
8. Claudia Ossola-Haring (Ed.): Handbook Key Figures on Corporate Financing , 2006, p. 77.