A major overhaul of partnership law is on the horizon
This reform, which is expected to be adopted during the current legislative session and take effect on January 1, 2023, aims to modernize the law governing partnerships and adapt it to the needs of today’s business environment, as well as to case law and standard contractual practices.
One of the key points is the statutory recognition of the Federal Court of Justice’s (BGH) case law regarding the legal capacity of general partnerships (Außen-GbR) and the associated introduction of a corporate registry for general partnerships (GbR), which, like other legally capable partnerships, will enable them to to prove their existence and the authority of the persons acting on their behalf through entry in a public register.
While registration there is generally voluntary, it is mandatory for certain legal transactions, such as the acquisition of real estate or the acquisition of an interest in other companies. Furthermore, registration is intended to enable the GbR to participate in conversion processes under the German Transformation Act (UmwG).
Furthermore, changes are to be made to the law governing defects in resolutions. Until now, a formal or substantive defect in a partners’ resolution has resulted in the resolution in question being void. Under the law governing stock corporations, which is also applied to the GmbH, however, only certain particularly serious defects result in the nullity of the resolution; the remaining defects merely mean that the resolution is initially effective but contestable within a certain period. Without such a challenge, the defect becomes irrelevant and the resolution becomes definitively effective. This system is now to be introduced in the German Commercial Code (HGB) for general partnerships (OHG) and limited partnerships (KG) as well. For civil-law partnerships (GbR), it may also be declared applicable through a corresponding provision in the partnership agreement.
Finally, the legal forms under partnership law are to be made available to self-employed professionals as well, provided that the relevant professional regulations also permit this.