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The future of company law: The significance of the modernisation of partnership and company law (MOPeG) for the GbR

From January 1, 2024, new regulations for civil law partnerships (GbR) will come into force. The legal framework for this is provided by the Act on the Modernisation of Partnership Law (MoPeG).

Here you can find out what changes you will face with modernisation and what exactly you need to pay attention to as an entrepreneur.

Partnership law is being modernised – but why?

The partnership under civil law (GbR) follows legal regulations that were laid down decades ago in the German Civil Code (§§ 705ff.) and have not been updated to this day.

The GbR is not an independent legal entity in the legal sense. While OHGs and KGs are similar to legal entities according to § 124 HGB, it has long been debated whether a GbR can independently conclude contracts, hold property and act in court. There was uncertainty as to whether these rights belonged exclusively to the shareholders or to the company as a whole. The regulations in the BGB were based on the assumption that only the shareholder group can carry out legal transactions.

The decision of the BGH clarified that the GbR analogous to § 124 para. 1 HGB has the legal capacity to act. It can sue and be sued independently in court and conclude contracts – provided it is an external company and not just an internal company.

This statement requires an adjustment of the legal framework of the GbR, which is being tackled with the modernisation of the Persons and Companies Act (MoPeG).

The most important facts in brief:

  1. The legal changes come into force on January 1, 2024
  2. There are no regulations for the transition period
  3. Both existing GbRs and newly founded GbRs must comply with these new regulations
  4. The new legal framework makes a clear distinction between GbR with legal capacity and GbR without legal capacity
  5. The GbR must be entered in the so-called “company register” in the future
  6. Once the GbR is registered, it bears the legal form suffix “eGbR

What will change with the recognition of the legal capacity of the GbR?

As a result of the modernisation of the legislation, it will now be possible to make a concrete distinction between a GbR with legal capacity and a GbR without legal capacity.

A GbR without legal capacity, also known as an “internal company“, is a special form of civil law partnership (GbR) that is not a separate legal entity in legal terms. This means:

  1. The GbR without legal capacity does not actively participate in business transactions: it is not authorised to acquire rights and obligations in its own name or to enter into liabilities. Instead, all legal relationships are entered into personally by the individual shareholders.
  2. The purpose of a GbR without legal capacity is purely to organise the legal transactions between the partners

A GbR with legal capacity, also known as an “external company“, on the other hand, participates in legal and business transactions. This means:

  1. The GbR with legal capacity has a legal existence and can acquire independent rights and obligations, conclude contracts and appear in court (legal action against an individual partner remains possible).
  2. The entire assets of the GbR are assigned to it as part of its legal personality as a company

What do you need to know to be entered in the company register?

The new company register is a digital platform that was created as part of the modernisation of the Persons and Companies Act (MoPeG). It is used for the electronic recording, storage and provision of information about the GbR (similar to the commercial or cooperative register). This makes the process of registering, managing and disclosing company data more efficient, transparent and up-to-date.

The registration of your GbR is not mandatory, so there is no general obligation to register.

  1. You must have your GbR registered if you want to prove your legal capacity to act, i.e. if you carry out legally relevant transactions that go beyond the internal relationship.
  2. The partners have the freedom to choose whether the GbR should be entered in the new company register. If you decide to register, you will need a notarised application for registration. If you change essential features of your GbR (the name, the registered office of the GbR, etc.), this change must also be registered with a notary.
  3. If you wish to remove your registered GbR (eGbR) from the register, the GbR must be completely liquidated in order to effect the deletion.

There are cases in which you have to register your GbR. The de facto obligation to register always exists in situations in which your GbR wishes to dispose of certain rights with external legal effect. Such rights concern:

  1. Real estate: Until now, a GbR could have property rights entered in the land register. From January 2024, however, this will only be possible if the GbR is entered in the company register. For example, the acquisition of real estate is not legally effective without an entry in the company register.
  2. For existing GbRs before 2024: GbRs that were founded before 2024 do not have to be entered in the company register immediately. However, registration is required in the event of changes to the company relationships that affect other registers (e.g. the commercial register).
  3. The GbR as a shareholder: From January 1, 2024, a GbR must be registered in the company register in order to be able to record its shareholder position in other registers such as the commercial register. Without this registration, their shareholder role remains unnoticed, which can lead to legal consequences.

What are the advantages of registering a GbR in the company register?

Registering a GbR (eGbR) in the company register offers you various advantages:

  1. Legal capacity and capacity to act: Upon registration, the GbR becomes a company with legal capacity. This means that it acquires an independent legal personality and can acquire independent rights and obligations, conclude contracts and appear in court.
  2. Clear identity and trust: Entry in the company register gives the GbR a clear identity and legal status. This creates trust among business partners, customers and other stakeholders. Business partners can easily check whether the GbR is legitimised as a business partner. The obligation to disclose company data promotes timeliness and transparency.
  3. Limited liability: As a rule, the partners of a registered GbR are only liable with their contributions or capital shares. This limits personal liability. It also gives the partners the certainty that the GbR correctly documents their legal position and shareholding.
  4. Maintaining status as a small business: Registration does not change the status of the GbR. It is still considered a small business and therefore does not become a commercial trade within the meaning of the German Commercial Code.
  5. Simplification of business transactions: Previously, shareholders had to manage the company at the same time in order to be authorised to represent third parties. As a rule, shareholders can now represent the company independently, regardless of their role in the management. This makes business transactions much easier. The entry of the power of representation in the company register ensures clear information and security in legal transactions. Non-registered GbR partners must prove their power of representation separately, often by means of powers of attorney.
  6. The registered office: eGbR shareholders can choose any location in Germany as their registered office, without this location having to be the same as the registered office. This means that the eGbR can also conduct its business abroad. Unregistered GbRs do not have this privilege. Its registered office must correspond to the actual administrative headquarters in Germany.

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