What businesses need to know about GbRs in Germany



  1. 导言
  2. What is a GbR?
  3. What are the advantages of a GbR?
  4. What are the disadvantages of a GbR?
  5. How do I register a GbR?
  6. How do I dissolve a GbR?
  7. How do I convert a GbR into a GmbH?

If you are looking to start your own business, you should think carefully about which legal formation best fits your needs. A GbR is a popular option for founders due to the relative lack of barriers. Read on to discover what a GbR (Gesellschaft bürgerlichen Rechts, or civil law partnership) is; what advantages and disadvantages it has; and how to register, dissolve, or convert a GbR into a GmbH.

What’s in this article?

  • What is a GbR?
  • What are the advantages of a GbR?
  • What are the disadvantages of a GbR?
  • How do I register a GbR?
  • How do I dissolve a GbR?
  • How do I convert a GbR into a GmbH?

What is a GbR?

GbR is short for “Gesellschaft bürgerlichen Rechts” in German, or “civil law partnership” in English. A GbR is a business structure in which two or more people join forces to bring a project to life and pursue common business interests. This coalition can take place informally, which makes the GbR the most simple and straightforward legal formation of a partnership under German law. GbRs are commonplace in both business and private ventures, even if they are less well-known than, for example, a GmbH or AG.

When compared with other legal formations, a GbR can be founded relatively quickly and easily. Among other purposes, this makes it ideal for bringing together small business operators, members of freelance professions, and group practices or joint ventures. The legal basis for a GbR is regulated in paragraphs 705 to 740 of the German Civil Code (BGB). As a result, a GbR is also known as a BGB business.

Since January 2024, when the Act to Modernize the Law on Partnerships (MoPeG) came into effect, the legislature has made a clear distinction between a GbR and an eGbR. The difference between a classic GbR and an eGbR (“eingetragenen Gesellschaft bürgerlichen Rechts” or “registered GbR”) lies in the registration of a newly created Companies Register, which grants the eGbR legal capacity.

What are the advantages of a GbR?

It is easy to found a GbR, and this can be done with minimal financial outlay. In addition, aside from a few exceptions, you can use a GbR for almost any conceivable purpose. A GbR does not need to be entered in the Commercial Register. Another advantage is that, unlike most other legal formations, establishing a GbR does not require a minimum level of capital as business assets. This makes it a particularly compelling option for business owners with limited financial resources.

Founding a GbR is made even easier by the fact that the legislature does not require a memorandum of association—even if one is recommended (see below). If a memorandum of association is drawn up, this offers the partners in the GbR plenty of scope for regulating their legal relationships. In general, the partners of a GbR have many opportunities for co-determination.

Accounting processes for a GbR are just as straightforward as setting up the business. Providing profit does not exceed €60,000 per year and turnover does not exceed €600,000 per year, there is no requirement to prepare or publish a balance sheet or an annual financial statement. Administrative efforts are limited to a simple cash income statement—see Section 4 Paragraph 3 of the Income Tax Act. If the GbR generates losses, the partners can offset these relatively easily with their own capital.

What are the disadvantages of a GbR?

Founding a GbR requires at least two people, making it unsuitable for sole traders. A GbR’s business name may not contain any fictitious or brand names, thus placing limits on the creativity of the partners.

Resolutions may only be passed unanimously, which can hinder decisions and delay processes, unless explicit changes to the resolutions are outlined in the memorandum of association.

A further potential disadvantage stems from the lack of share capital: among other things, a GbR tends to have a less favorable reputation among investors than other legal formations, as they perceive it as less reputable. Startups that rely heavily on investors for growth should carefully consider whether a GbR is the appropriate legal formation for them.

However, the biggest disadvantage of a GbR is that there is no limitation of liability on the business’s assets: partners are always personally liable with their own private assets.

Furthermore, the fact that a GbR’s annual surpluses are transferred to the partners and taxed via their respective personal tax returns can also be considered a disadvantage.

Any GbR that generates over €500,000 annually is automatically classified as a commercial enterprise by law and must then be converted to a general partnership (offene Handelsgesellschaft or OHG). This enforced conversion can be viewed as a disadvantage in individual cases.

How do I register a GbR?

Although it is relatively easy to register a GbR, there are a few formal steps that should be followed. Furthermore, in order to ensure you meet all legal requirements, you may wish to consider using the expertise of tax advisors or lawyers.

  • Create a memorandum of association (optional)
    Although not required by law, the partners should draw up a memorandum of association before founding their GbR. This will govern the fundamental aspects of the GbR, such as the business’s purpose, allocation of responsibilities, decision-making, profit distribution, or liability. If the most important points are set out in writing, this reduces the potential for conflict within the GbR.

  • Choose a name
    As a partnership, the GbR is not a company, and therefore does not have a formal trading name. However, it must still be given a business name. This comprises the names of the partners along with “GbR.” This stems from the fact that GbRs do not appear in any public register showing the persons with economic responsibility for the business. A business name is required to ensure transparency about the individuals behind the GbR. It should be included on any official documents and on the GbR’s website. Ideally, the GbR’s name should also reflect the business’s purpose—for example, by specifying the field of activity. Once the partners have decided on a name, they should confirm its availability with the local Commercial Register or trade office.

  • Register the business (only for commercial operators)
    Anyone carrying out commercial activities as a GbR must register it with the local trade office. The trade office forwards all relevant information to the responsible tax office. However, if the GbR is a consortium of freelancers, there is no requirement to register with the trade office. For more detailed information about the different types of self-employment in Germany, check out our article on the subject.

  • Register the GbR with the tax office
    The tax office reaches out to commercial operators after they have registered their business. However, freelancers must contact the tax office independently when setting up a GbR. In both cases, the partners must fill out a tax registration form. This information is then checked by the tax office. Finally, the GbR is assigned a tax number, which must be stated in all future tax matters. If the GbR is planning to do business overseas, the partners can also apply for a value-added tax (VAT) identification number via the form.

  • Register the GbR with the Chamber of Commerce and Industry (only for commercial operators)
    Just as the trade office forwards the GbR’s registration to the tax office, the Chamber of Commerce and Industry (IHK) is also notified. The IHK then sends a registration form to the partners of the GbR. Commercial operators are compulsory members of the IHK. Freelancers, on the other hand, are generally not members of the IHK.

  • Enter the GbR in the Commercial Register (optional)
    Strictly speaking, a GbR does not need to be entered in the Commercial Register. However, entry can be made on a voluntary basis if a commercial operation exists. The corresponding registration takes place at the local district court.

  • Register employees with social insurance providers
    If a GbR employs staff, they must be registered with social insurance providers, and social security contributions must be paid. A company number is a prerequisite for this. Applications can be made at the Employment Agency. For employees who are required to make social security contributions, the GbR must also pay income tax to the tax office. Additionally, employees must be registered for statutory accident insurance and with the employers’ liability insurance association.

  • Open a business bank account (optional)
    A business bank account is not a legal requirement for a GbR. However, it is advisable to open a new bank account to ensure your business and private finances remain separate.

  • Set up accounting processes and take out insurance
    Proper accounting must be carried out—even for a GbR with modest cash flows. This should be set up using internal or external resources to ensure that, among other things, tax returns are correctly prepared. Furthermore, it should be carefully considered whether insurance is necessary for the business activities, and, if so, which insurance would be appropriate.

How do I dissolve a GbR?

There are various reasons for dissolving a GbR. Aside from insolvency and the expiration of temporary or time-boxed businesses, these reasons include the long-term nonfulfillment of the business’s core purpose, or a final fulfillment of this purpose. However, the death of a partner does not automatically signify the end of a GbR—even if only one partner can run the business as a result. In this scenario, the GbR may continue to operate as a sole establishment.

Regardless of the root cause, the dissolution of the GbR should be carried out using the following steps:

  • Check the memorandum of association
    Ideally, the partners will have outlined clear provisions within the memorandum of association that apply in the event of dissolution. Therefore, the memorandum of association is the first thing to refer to when dissolving a GbR.

  • Pass a resolution
    In order to dissolve a GbR, a unanimous resolution must be made by all partners. This should be formally recorded in writing.

  • Settle debts
    A GbR can only be dissolved once all debts and liabilities have been settled. Therefore, the business must—among other things—pay all outstanding invoices and taxes.

  • Liquidate assets
    Once debts have been settled and the GbR is dissolved, the business’s remaining assets are liquidated and distributed among the partners (see Section 735 of the German Civil Code). Distribution is either proportional to the capital stock or follows agreements made in the memorandum of association.

How do I convert a GbR into a GmbH?

As the success of a GbR increases, so does the personal liability risk of the partners. This can be one of the reasons to convert a GbR into a GmbH. There are two main options for transferring a GbR’s assets into a limited liability company: changing the legal formation of the business or pursuing a noncash incorporation.

Since January 1, 2024, when the reform of the partnership law came into force, it has been possible to convert a GbR directly into a GmbH provided it is an eGbR (i.e., a GbR that appears in the Companies Register). For a classic GbR that is not entered in the Companies Register, an interim step is still required before converting to a GmbH. This step involves registering as a general partnership (OHG) or partner company.

In both scenarios, you will require a detailed conversion report and resolution from the partners in order to proceed with a change in legal formation. Of course, the basic provisions for establishing a GmbH must be adhered to—including the creation of a notarized partnership agreement. In doing so, the GmbH becomes the legal successor of the GbR, and all rights, obligations, and assets are transferred.

The second option for converting a GbR into a GmbH—the noncash incorporation of a company—sees the partnership and all of its business assets passed to the GmbH as a contribution in-kind. You are required to transfer all the GbR’s assets in order to comply with the civil laws regulating the transfer of ownership.

For more useful information about forming a business, visit the Stripe resources portal. If you are looking for professional support for your financial processes, please contact our sales team.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accurateness, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular situation.