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Focus on company law

In German law, the legal field „Corporate Law“ covers the law of associations under private law which are established for the purpose of reaching certain common goals through legal transactions.

In addition, the common company law of the EU member states is valid in Germany.

According to § 705 BGB a company is subject to the three following conditions:

  1. Merger of several persons by contract,
  2. The merger pursues  a permitted purpose,
  3. The contract parties commit themselves to promote the common purpose.

In a broader sense, the corporation is defined through these characteristics. Within these, there is a distinction to be made between corporations in a narrow sense (partnerships, such as GbR, the OHG and KG) and corporate bodies (for example, associations under civil law, public limited company (AG) and the limited liability company GmbH). The partnership differs  from the association in  its dependence of their legal existence of the shareholders and their organizational structure. According to the dominant opinion and scheme of the law,  the basic form of partnerships is the non-trading partnership, the basic form of associations is the association under civil law .

Partnerships

Partnerships are no legal entities and therefore have no legal peronality by law, although in practice they are subjects of rights and obligations, indepentent from their members. The only exception is the silent partnership.

  • Non-trading partnership (GbR )
  • Professional partnership (PartG)
  • Gewieneral partnership  (oHG)
  • Shipping partnerships (Partenreederei)
  • EEIG European economic interest grouping (EWIV)
  • Limited partnership (KG)
  • Silent partnership

Corporate Bodies

Non-capitalist corporations

The registered association (eV) and the legal foundation are also seperate legel entities, but not coroporations. The associations has members, but not necessarily property. The legal foundation holds a property, permanently dedicated to the foundation‘s purpose,  but no members, shareholders or owners.

Corporations

  • Corporate bodies are legal entities.
  • Limited liability company (GmbH)
  • Public limited company (AG)
  • Partnership limited by shares (KGaA)
  • European Company (SE)
  • Registered cooperative (eG)
  • European cooperative society (SCE)
  • Public limited company in the sole activity of the property sector (REIT-AG)

Mixed forms

Additionally there are some combinations of the legal forms, consisting of several different corporations and partnerships. In this case, a corporate entity or legal foundation acts as personally liable partner for a partnership or limited partnership.

  • GmbH & Co.
  • GmbH & Co. KG
  • GmbH & Co. KGaA
  • GmbH & Co. OHG
  • AG & Co. KG
  • AG & Co. KGaA
  • AG & Co. OHG
  • Stiftung & Co. KG

Change of legal form

With the help of the Corporate Transformation Act, German legislature has simplified the change of the legal form significantly.

Group Law

Regulations for the group law can be found in § § 15 to 19 of the AktG and in the third book AktG.

Conflict-of-laws

Due to the latest supreme court decisions, that – because of freedom of establishment - companies founded in the EU must be recognized by other EU member countries as well, even if these companies transfer their effective administration headquarters to another EU country, there are recently more mixed forms including foreign company forms (eg Limited & Co.KG).