Law to modernize partnership law - reform of the GbR (from 1 January 2024)

The German Partnership Law Modernization Act (MoPeG) introduces changes to the German Civil Code (BGB) company law (also known as a civil law partnership or GbR). Although the reform does not come into effect until January 1, 2024, it is advisable to familiarize yourself with the new regulations early on.

The new regulations distinguish between GbRs with and without legal capacity. According to Section 705 (1) of the German Civil Code (BGB) (as amended), the joint will of the partners regarding whether the partnership (GbR) should participate in legal transactions is decisive for the question of legal capacity. It is therefore recommended to include this will in future partnership agreements.

In relation to third parties, a GbR with legal capacity is created when it participates in legal transactions with the consent of all partners, but no later than upon registration in the companies register pursuant to Section 719 Paragraph 1 of the German Civil Code (BGB) (as amended). Under the new regulations, a GbR with legal capacity can be registered in the newly introduced companies register. Such registration is mandatory if the GbR itself is to be registered in other registers (e.g., the list of partners in the commercial register or the land register). Registration of a GbR as a "registered partnership under civil law" or "eGbR" is generally irreversible.

In the future, the assets of the GbR itself will be considered a legal entity and will no longer be allocated jointly to the partners as joint assets. The partners' profit and loss sharing will be based on their shareholdings and no longer on their share capital, unless the partnership agreement provides otherwise.

Even under the new regulations, the partners are generally jointly authorized to manage and represent the GbR, unless the partnership agreement provides otherwise. Any restriction on the power of representation vis-à-vis third parties, similar to that in a general partnership, is ineffective under the new regulations.

The liability of the GbR partners remains generally unlimited. However, in certain cases, a pro rata liability, a liability based on per capita, or a liability up to a specified amount can be agreed upon as a liability model.

Due to the comprehensive legal changes, it is advisable to review the articles of association of an existing or future GbR and, if necessary, amend them. Our firm is happy to advise you on all matters of corporate law and support you with any questions you may have regarding the new corporate law.