Civil Law Partnership (GbR) in Germany

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GBR is a partnership in Germany owned by individuals or entities with separate business licenses that enter into an oral or written partnership agreement.

The establishment of a GbR could be done in the form of an article of association. In this agreement, at least two partners undertake to achieve a common goal in the manner specified in the agreement. In principle, the contract does not have to be in writing. However, in order to have a document between the parties that clearly outlines how to work together and to prevent potential misunderstandings, it is definitely recommended to write the article of association and get it certified at notary. If a property is to be registered in the name of GBR or one of the partners is a limited company such as GmbH, a notarized certificate is required.

“Our team will help you if you need to write a statute for your GBR and you already have certain limitations in mind.”

Commercial registration

GbR is not a trade under German Commercial Code (HGB). Accordingly, there is no obligation to participate in the commercial registration. However, in certain circumstances, if the development of the GbR becomes commercial in nature, it may be subject to commercial registration.

GbR legal form may change in other ways if registered commercially. Like OHG or KG. 

“Use our consulting services to choose the best form in Germany after business registration.”

Partners 

The shareholders of a GbR can be natural or legal persons.

Company Name

A company with a German trade code (HGB) cannot operate GbR. The business name must include the names of the shareholders, at least one of whom must be the full name (first name and last name). In correspondence and invoices, all shareholders must always be identified by their first and last name. The start-up of the company, the change in the relations of the company, the change of the address and the cessation of the business operations must be reported by each of the partners to the Trade Office (Gewerbeamt).

Management authority 

The general rule of GbR is joint management, but the company can choose a representative as the main representative in case of doubt as the main decision maker and include him/her in the company contract (articles of association).

Responsibility

GbR is responsible for all company assets. Under the principle of double commitment, GbR partners are also personally liable. Of course, shareholders’ liability for GbR assets or transactions can be limited in the letter of intent. However, the limitation of liability is effective only if it can be identified by a third party. This can be done by presenting the article of association. Limitation of liability for the assets of the company is also possible by agreement with a third party. In addition, shareholders are obliged to pay their financial shares according to their shares. After the departure of one of the partners, the company (other partners) will be liable for the resulting obligations and debts, if they have pre-determined obligations, five years after the departure of the shareholder, if the claim is taken to court.

Withdrawal of a shareholder

In principle, the GbR is dissolved upon the departure of a shareholder, unless the condition for continuation is specified in the partnership agreement. The company is then run by at least two (remaining) shareholders, while the resigned partner’s share is valued in proportion to the remaining shares and paid by them. The company can also continue to operate as a sole proprietorship. (Einzelunternehmer)

If a new partner enters the company, a new shareholder acquires a share of the company’s assets, which is usually assessed based on the value of the partnership and its share capital in the asset. The new shareholder is only liable for the debts to the extent of his share in the company.

Liquidation

The most important reasons for the dissolution of GbR are:

  •  Expiration of the period when the company was established,
  •  Achieving the company’s goal or not being able to achieve the goal and termination,
  • Death of a partner,
  • Dissolution decision
  • Bankruptcy of a company or a partner.

If you have questions about GBR registration or other legal forms in Germany, you can use our expert advice. contact us!

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