Municipal companies

The public sector also regularly utilizes the legal structures provided by private company law in its operations. This applies both to the provision of public services (e.g., a county-owned hospital LLC) and to so-called economic activities (e.g., a municipal parking garage LLC).

However, to safeguard the public interest, the local government laws of the individual federal states establish certain requirements and restrictions on such activities conducted under private law. On the one hand, this is intended to protect the municipality from liability that it cannot control. On the other hand, it is intended to ensure that the municipality and its representatives, in particular the elected municipal or district council members, retain sufficient influence and a say even when the municipality outsources certain activities to a private-law company. To this end, the articles of association must provide for the establishment of a supervisory or control body within the company—typically in the form of a supervisory board—that possesses the necessary powers, and for members of the municipal or district council to be appointed to this body as representatives of the municipality.

VOELKER regularly advises and assists municipalities in the establishment of or participation in private-law companies, particularly with regard to compliance with the requirements of municipal commercial law. We pay particular attention to the drafting of the articles of association.

In addition, we regularly offer training sessions for municipal or county council members who are appointed to the supervisory board of a municipal enterprise. In these sessions, we explain the rights and obligations associated with assuming this office, thereby optimally preparing them for their duties.