When you group your armies its essential that you understand that each leader has a Command Penalty Capacity (CPC).
This is a parameter for each stack. It is worked out separately for each stack. Stack is defined above as the number of units/divisions in a province.
If the total number of units in the stack exceeds the Command Penalty Capacity when attacking, then the excess units in that stack receive a -75% penalty.
For each attacking stack, it is the capacity of the most senior leader in the stack.
if the most senior leader is an FM, then it is 12
if the most senior leader is an GEN, then it is 9
if the most senior leader is an LT, then it is 3
if the most senior leader is an MJ, then it is 1
For a defending stack it is the sum of all the leaders present in the stack. (Unless you are being attacked by aircraft- according to the manual defence from aircraft is handled as per attack- each stack is assessed individually)
Thus if we have 13 units in an attacking formation commanded by a FM (display of 13/12), one unit will have a -75% penalty. If the units were defending the display would also read 13/12. If we have 13 units units in a territory, but 12 of them will be under a FM and the 13th will be under a LT and the stack was attacking (from one territory) then the display would read 13/12 - the 13th unit would be at -75%. If the same units were defending then the CPC will be 15 (FM 12 + LT 3 = display 13/15) thus no unit will get a -75% penalty, but ONLY if they are defending.
The stack capacity for all the formations in a province may be doubled by an HQ adjacent or in the same province. The HQ does not have to be present at the start of the combat - as soon as the HQ becomes adjacent to or present at an existing combat, the combat efficiency values alter accordingly.
if the most senior leader is an FM, stack capacity is doubled to 24
if the most senior leader is an GEN, stack capacity is doubled to 18
if the most senior leader is an LT, stack capacity doubled to 6
if the most senior leader is an MJ, stack capacity is doubled to 2
Note that stack capacity and formation capacity are different things as explained below in the HQ, skills, and traits section.
Thus in the same situation, but with a HQ present as one of those 13 units, we would have a CPC of 24 if one formation was commanded by a FM, and a CPC of 30, if a second formation was commanded by a LT. No unit will get the -75% penalty command capacity penalty.
The units receiving the penalty are the lowest ones in the formation list for a stack.
There is a limit to the number of ATTACKERS in one stack - 24 per territory (under an FM with a HQ present - 18 if the highest is a general with HQ and so on). If there is no HQ in the area then the CPC will be max 12/FM, 9/G, 3LT & 1MJ. So in the above example if 13 units (12 for FM and 1 LT) attacked from one province with a HQ the display will read 13/24.
This means that if you attack with an FM+23 units from one direction, and an FM+25 units from another direction, the combat screen will show 48/48 (if a HQ is present/nearby province), but in fact one of your units will get a -75% penalty.
There is no limit to the amount of DEFENDERS in the stack as long as you have enough command capacity to cover all the units.
There is no extra benefit for NOT using the full CPC - i.e. placing 9 units under a FM (9/12).