I. Introduction and background

The regulatory concept of the GbR, i.e. §§ 705 et seq. German Civil Code (Bürgerliches Gesetzbuch – BGB), dates back to 1900 and has only undergone minor legal changes since then. However, these statutory provisions have not been in line with the prevailing understanding of the system and legal capacity of partnerships for some time. Case law has therefore further developed the GbR in line with practical needs, so that §§ 705 ff. BGB no longer adequately reflect the legal situation. For example, individual statutory provisions are still based on the original understanding of the legislator that the GbR is a “community of joint owners without legal capacity and without its own legal subject quality (Gesamthandsgemeinschaft ohne eigene Rechtssubjektqualität)”, whereas the Federal Court of Justice (Bundesgerichtshof – BGH) already decided in 2001 (BGH, judgment of 29 January 2001 – II ZR 331/00, NJW 2001, 1056; “ARGE Weißes Ross“) that the (external) GbR itself can be the bearer of rights and obligations and has its own legal capacity insofar as it participates in legal transactions itself. The reform of partnership law was therefore agreed in the coalition agreement of the 19th parliamentary term. To implement this reform, the legislator passed the so-called MoPeG, which will come into force on 1 January 2024 (see honert Q4 2021 newsletter on the associated need for action for existing GbRs).

II. Legal approximation of the external GbR to commercial partnerships

The MoPeG essentially codifies the existing legal situation in partnership law, which is characterized by established case law. However, it also introduces a number of innovations.
The recognition of the legal capacity of the external GbR will be explicitly stipulated in the future. The legislator expressly distinguishes between a partnership with legal capacity, which can itself acquire rights and enter into liabilities, and a partnership without legal capacity (§ 705 para. 2 BGB, new version). The distinction is made according to whether the partners want the GbR to participate in legal transactions itself. In contrast to a partnership without legal capacity, a GbR with legal capacity can form its own company assets (§ 713 BGB, new version). The partners of the GbR with legal capacity are entitled to membership rights in the GbR, while the object of allocation for the active and passive company assets is the GbR with legal capacity itself. This fully codifies the renunciation from the principle of a community of joint ownership (Gesamthandsprinzip) that has been (partially) enshrined in law to date, according to which the assets do not belong to the partnership but to its partners “jointly and severally” – as will also be the case in the future with a community of heirs (Erbengemeinschaft), for example.
Under the previous legal situation, the power of representation of the GbR partners in the external relationship is linked to the existing management authority in the internal relationship, which in turn, according to the statutory rule, is jointly held by all partners. According to the amendments of the MoPeG, the legal rule for a GbR in future is that the partnership is represented jointly by all partners, irrespective of the distribution of management authority in the internal relationship. As in the past, this can also be deviated from in future by means of a provision in the partnership agreement.
With regard to shareholder liability, the MoPeG expressly regulates the unlimited personal and joint and several liability of the shareholders in the external relationship for liabilities of the GbR (§§ 721 and 721a BGB, new version), which already applies under the current legal situation. Agreements to the contrary are ineffective vis-à-vis third parties. The privileged liability (diligentia quam in suis) that previously existed in the internal relationship between the GbR and the partners, according to which a partner is only liable for the care that he or she exercises in his or her own affairs, no longer applies without replacement. Any agreements under company law remain unaffected by this, so that the liability of the partners in the internal relationship can continue to be structured individually.
According to the current legal situation, the registered office of a partnership must always be the place of de facto management. This applies regardless of any agreements in the partnership agreement. The amendments to the MoPeG make it possible for the first time for the registered GbR (cf. registration below) to agree on a contractual registered office located in Germany (§ 706 BGB, new version), in deviation from the so-called administrative registered office.
The MoPeG will also change the succession regulations of the GbR in future. According to the current legal situation, the death of a partner leads to the dissolution of the GbR. In practice, however, the partners regularly agree – in deviation from this – a so-called continuation clause in the partnership agreement, according to which, in the event of the death of a partner, this partner merely withdraws from the GbR and the company is continued with the remaining partners. According to MoPeG, the death of a partner will no longer lead to the dissolution of the partnership, but to the withdrawal of the deceased partner (§ 723 para. 1 no. 1 BGB, new version). The statutory succession regulation is dispositive, meaning that the partners can also agree deviating provisions in the partnership agreement in future, such as the dissolution of the GbR in the event of the death of a partner as under the previous legal situation. A continuation of the GbR with the heirs or with certain (qualified) heirs in place of the deceased partner will take place if this is expressly provided for in the partnership agreement (§ 711 para. 2 BGB, new version). Under certain conditions, heirs joining the GbR can demand that they be granted the status of a limited partner, or otherwise they can terminate their membership without notice (§ 724 para. 1 and 2 BGB, new version).

III. Entry in the company register

A very important innovation of the MoPeG for the GbR in practice is the introduction of a company register, similar to the commercial register for commercial companies. With this, the legislator intends to enable the GbR to have its own subject register publicity (Subjektregisterpublizität) through registration in future. The creation of a public register for the GbR ensures transparency and legal certainty for legal relations with regard to the existence, identity and proper representation of partnerships under civil law.
According to the current legal situation, the GbR partners are largely anonymous. There are only special regulations for certain property registers that create a certain degree of publicity and transparency. § 899a BGB, for example, stipulates that in the case of a GbR entered in the land register (Grundbuch), it is presumed with regard to the registered right that only the persons entered in the land register are partners in the GbR. However, the associated publicity and transparency is limited in each case to (i) companies entered in such a property register and (ii) the respective registered right.
In future, partners will be able to register a GbR in the new company register and have it entered. Registration is generally voluntary and not a prerequisite for the GbR to acquire legal capacity. The GbR can continue to participate in legal transactions even before registration. However, the GbR is deemed to have come into existence vis-à-vis third parties at the latest upon registration.
Even after the MoPeG comes into force, there is therefore no obligation for the GbR to be entered in the newly created company register. However, the voluntary nature of registration becomes an registration requirement or even an obligation to register if the GbR (i) wishes to dispose of its rights, such as shares in companies entered in the commercial or company register, is entered (or to be entered) as a shareholder in the list of shareholders of a limited liability company (GmbH) or in the stock register or rights entered in the land register and (ii) if a GbR participates in transformation measures in accordance with the Transformation Act (Umwandlungsgesetz). If, in the case of such measures, the respective entry of the legal change in the relevant register is not itself a prerequisite for the disposal in rem of the right in question (e.g. sale of a GmbH share), the GbR can effectively dispose of it, but the competent registry office will only execute the relevant legal change in the relevant register (e.g. deposit of the new list of shareholders in the commercial register) if the disposing GbR itself was previously entered in the company register. If the respective entry of the legal change in the relevant register is already a prerequisite for the disposal in rem of the right in question (e.g. entry in the land register when acquiring a property), the GbR can only dispose of this if the disposing GbR itself has previously been entered in the company register. This means that the registration requirement constitutes a de facto registration obligation for a GbR that, among other things, disposes of the aforementioned rights as part of its corporate purpose or business activities.
The entry is made at the court in whose district the GbR has its registered office (§ 707 para. 1 BGB, new version). Information on (i) the name, registered office and address of the GbR, (ii) the partners and (iii) the partners’ power of representation must be entered in the company register (§§ 707 para. 2, 707a para. 1 BGB, new version). The application for registration must also include a declaration that the partnership is not already entered in the commercial or partnership register. The application for initial registration must be made electronically by all partners of the GbR in a publicly notarized form. If changes are made to the information in the register over time, these must also be submitted for registration.
Upon registration, the partnership is obliged to use the designation “eingetragene Gesellschaft bürgerlichen Rechts” or “eGbR” as an addition to its name. If no natural person is liable in the GbR, the name must contain a designation that identifies this limitation of liability.
The publicity regulations under commercial law apply accordingly to a GbR entered in the company register (§ 707a para. 3 BGB, new version), i.e. the company register provides a level of protection for third parties comparable to the commercial register. Therefore, any changes after the registration of a GbR, e.g. in its shareholder structure, must be reported promptly for entry in the company register in order to avoid a legal appearance that deviates from the actual circumstances. In future, the identity of a registered GbR will be determined by the name and registered office of the company (§§ 707 para. 2, 707a para. 1 sentence 1 BGB new version). A registered GbR will only be deleted in accordance with general provisions, i.e. in principle only upon dissolution and liquidation (§ 707a para. 4 BGB, new version). When deciding on the registration of a GbR, it should therefore be taken into account that it is a registration “without a return ticket“. In future, a registered GbR will also be subject to the obligation to provide information on the beneficial owners, i.e. the registered GbR will also be included in the transparency register publicity. Consequently, the registration of a GbR also entails extensive disclosure of existing shareholdings.

IV. Outlook and consequences for the practice

With the MoPeG, the legislator is implementing a long-overdue reform of the GbR regulations. The adaptation of the statutory provisions to the current legal situation creates welcome legal certainty and clarity for those applying the law. However, the “minimally invasive” approach of the MoPeG also leaves some questions unanswered, so that there is still a considerable need for advice and structuring in practice.
Existing partnerships under civil law should – against the background of the upcoming changes to the law – review the provisions of their partnership agreement on representation, liability, registered office and succession with a view to any need for amendment or adjustment. The amendments to the MoPeG come into force largely without transitional provisions and also apply to all existing partnerships.
The introduction of the company register entails corresponding transparency and publicity for legal transactions with regard to registered partnerships und civil law. In view of the associated legal consequences, the decision to register a partnership under civil law must be carefully weighed up in practice. If existing or future partnerships under civil law are or become holders of rights to which one of the above registration obligations applies, or if they intend to dispose of such rights (e.g. property management companies), a timely entry in the company register should be ensured.