Germany Update: Modernization of Partnership Law – Company Register for Companies under Civil Law

On 01.01.2024, the Act on the Modernization of Partnership Law (MoPeG) will come into force. One of the main changes brought about by the MoPeG is the introduction of a so-called company register. It offers civil law companies (GbR) the opportunity to register and in this way to document and prove their own existence, identity, their shareholders and their representation relationships to third parties. In this respect, it is comparable to the commercial register. Just like the commercial register, entries in the company register also enjoy public credibility (§ 707a para. 3 BGB in the version from 01.01.2024).

No obligation to register

In contrast to commercial companies, there is no direct legal obligation for a GbR to be registered. In particular, the creation and legal capacity of a GbR will not depend on the entry in the register in the future. In the future, therefore, there will be parallel GbR with legal capacity in the form of a registered and an unregistered GbR. The former must and may refer to themselves as registered GbR (eGbR) in legal transactions.

However, registration obligation

However, there may well be an indirect need for registration. This applies in particular if the GbR is the owner of assets that are recorded in an object register, especially the land register, or if it wishes to participate in other registered companies:

Land register

In this respect, it is primarily important that in the future rights to a property for a GbR may only be entered in the land register if the GbR is entered in the company register (§ 47 para. 2 GBO). Therefore, if a GbR would like to acquire real estate or if a land charge or other real estate right is to be created in favor of a GbR, this will only be possible after a prior entry in the company register has been made. This also applies to GbR, which already hold real estate today. If there is a change of shareholders, e.g. due to inheritance, there is no way around registering the GbR.

GmbH shareholdings

The same applies to GbR companies that hold a GmbH shareholding. They can only be entered in the list of shareholders of the GmbH if it is an eGbR (§ 40 para. 1 p. 3 GmbHG). And in relation to the GmbH, as is well known, only the one who is also entered in the list of shareholders is considered a shareholder. Only he can exercise voting rights. Only the latter is entitled to distributions. GbRs that have already been included in a list of shareholders are only spared as long as there are no changes in their shareholder structure and share ownership.

Shares and shares in partnerships

The same applies to GbR companies that hold shares (Section 67 (1) sentence 3 of the German Act (Akt)) or shares in other commercial partnerships or partnerships (Section 707 a (2) of the German Civil Code (BGB), Section 105 (2) of the German Commercial Code (HGB), Section 161 (2) of the German Commercial Code (HGB)).

Expediency of registration

Irrespective of these registration obligations, there are also reasons that speak in favour of (voluntary) entry in the company register. For example, it is naturally much easier to prove the existence and identity of a company if this company is entered in a register and a corresponding extract from the register can be submitted. This also applies with regard to the representation of the company.

It may also be of interest that only an eGbR can in future have a (statutory) registered office at a different location than it corresponds to the actual administration of the company (administrative headquarters). This even makes it possible to choose the administrative headquarters abroad, as long as there is a registered office of the registered GbR in Germany. The foreign administrative seat will therefore no longer stand in the way of the recognition of the GbR in Germany in the future.

Registration also makes it possible to participate in transformations within the meaning of the Transformation Act. Only an eGbR is considered a convertible legal entity within the meaning of the UmwG.

Transparency Register

However, it should also be noted that an eGbR will in future be subject to the provisions of the Money Laundering Act via the Transparency Register and that entry in the company register is therefore associated with follow-up obligations with regard to the transparency register. This does not apply to an unregistered GbR.

Decision on registration

Whether or not a partnership under civil law should be entered in the company register is not a question of management on which the managing partners alone could decide. Rather, it is up to the shareholders’ meeting to decide on this. A corresponding proposed resolution requires the same majority as a proposed resolution to amend the articles of association.

Completion of the registration

As in the case of commercial partnerships, applications to the company register must generally be made jointly by all partners. It is possible to grant powers of attorney in the register.

Cost

The registration fee for a company with up to three shareholders is only EUR 100. For each additional shareholder, 40 EUR are added. Furthermore, notary fees are incurred for the notarial certification of the required register applications. Overall, however, the costs remain manageable.

Result

The shareholders of existing GbRs as well as persons who are thinking about founding a new GbR will have to think about having their company entered in the new company register in the future. In many cases, it will be advisable to proactively initiate the registration process and not wait until there is a de facto compulsion to register the company. This is especially true for companies that hold real estate or shareholdings.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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