GmbH share as business assets of a sole proprietor

The participation in a GmbH can be necessary business assets of a sole proprietor if the GmbH directly or indirectly promotes the activity or sales of the sole proprietor.

If a sole proprietor also holds an interest in a GmbH, the question of whether the interest is part of the business assets of the sole proprietorship can have far-reaching tax consequences. The Federal Fiscal Court has clarified that the GmbH shareholding is part of the necessary business assets if it is intended to decisively promote the commercial activity of the sole proprietorship in the same industry or if it serves to ensure the sale of products of the sole proprietorship. In these cases, the share in the company thus necessarily becomes a business asset. In the event of a change in the situation, it may then become an optional business asset, but a transfer to private assets in any case requires a clear act of withdrawal with the corresponding tax consequences.