Fundamental Reform of the German Partnership Law

Posted Monday 18th March 2024

With effect as of 1 January 2024 the German Partnership Law has been fundamentally reformed. Case law developed over decades has been codified in legal provisions and further measures were taken to ease the participation of civil law partnerships in business transactions. German civil law partnerships are very common for doing business or holding assets such as real estate in Germany.

The basis for those changes is the German Act to Modernise the Law on Civil Law Partnerships (Personengesellschaftsrechtsmodernisierungsgesetz, “MoPeG”), which, in particular, amended the standards relating to German civil law partnerships (Gesellschaft bügerlichen Rechts, “GbR”). The implementation of MoPeG will result in the introduction of the new legal form of the GbR registered with the commercial register, the so-called “eGbR”.

Here are some new innovations that have been implemented as part of MoPeG:

• Legal capacity: The legal capacity of the GbR is now recognized by law.
• Company register: The GbR can be entered in the newly created company register for GbR’s. Like the commercial register, the company register is a public register that can be accessed by anyone free of charge. The company register provides a kind of good faith protection for third parties. The registration in the register must include the name, date of birth and place of residence of the shareholders of the GbR and, for the company, their name, registered office and full address. After entry in the company register, the company must bear the addition “eGbr” to its name.
• Obligation to register with the company register: Registration is only mandatory if the GbR itself is to be entered in another public register or wishes to do so. This is the case, for example, if a GbR is to be entered in the land register as the holder of rights to a property or if the GbR wishes to acquire shares in a limited liability Company (Gesellschaft mit beschränkter Haftung, “GmbH”).
• No limitation of liability due to registration: In contrast to a GmbH, entry in the company register does not lead to a fundamental limitation of liability for the shareholders. The shareholders therefore continue to have unlimited personal liability for new and existing liabilities.

In addition, access to the legal forms of commercial partnerships will also be opened up to members of the liberal professions. Until now, only the partnership company with limited professional liability (Partnerschaftsgesellschaft mit beschränkter Berufshaftung, “PartGmbB”) was possible as a company form for members of the liberal professions. In particular, opening up the option of choosing a GmbH & Co. KG as a legal form now makes it possible to make liability relationships more flexible, as freelancers can now agree a general limitation of liability.

However, in order to protect the specific protective interests of the respective professional practice, the possibility of choosing a GmbH & Co. KG as a legal form depends on the federal or state regulations of professional law. This means that professional law must expressly permit registration.

If you have any questions about the reform of the German partnership law and the impact of the changes on current or newly formed companies, please get in touch with Dr. Maximilian Rittmeister, lawyer, Fon +49 (0) 69 79405 210, E-Mail maximilian.rittmeister@bhp-anwaelte.de

This article was written by Dr. Maximilian Rittmeister, Partner at bhp Bögner Hensel & Partner.

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This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.