Managing and representing a German GbR: Key regulations to know

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  1. 导言
  2. Who can manage a GbR?
  3. How can management be transferred to individual partners?
    1. Joint management
    2. Limited management authority
    3. Individual management
    4. Interim management
  4. What are the advantages of transferring management to one person?
  5. What is the difference between managing and representing a GbR?
  6. Who can represent a GbR?
  7. How do you transfer the power of representation to nonpartners?

Roughly 200,000 civil law partnerships (GbR) operate under registration with Germany’s financial conduct authorities. In addition, there is a large number of private associations operating in the form of so-called German Civil Code (BGB) companies. The benefit of opting for a GbR formation is that it’s flexible and not overly complex, but there are still several legal requirements to contend with. Of particular importance here are the questions of the person running the business and who is permitted to represent the venture externally. That’s because these specific regulations determine the company’s ability to conduct business day-to-day and provide a safety net for partners, protecting their rights.

This article explains the difference between managing and acting for a GbR, including who runs the business and who can advocate for the company. We’ll also explain how to transfer responsibility for overseeing the operation to individual partners, along with the benefits of this approach. Plus, we’ll show you what options you have for transmitting power of representation to nonpartners.

What’s in this article?

  • Who can manage a GbR?
  • How can management be transferred to individual partners?
  • What are the advantages of transferring management to one person?
  • What is the difference between managing and representing a GbR?
  • Who can represent a GbR?
  • How do you transfer the power of representation to nonpartners?

Who can manage a GbR?

In principle, all partners of a GbR share joint management authority, meaning that they together decide on matters affecting the organization’s internal structure to ensure each member has equal influence over important affairs.

The partnership agreement, however, is able to provide for alternative provisions. For example, it can transfer oversight solely to individual partners. It is also possible to limit it to multiple persons. This approach enables the business to be flexible while regulating decision-making processes efficiently.

How can management be transferred to individual partners?

Management authority governs who handles what internally, and clearly defines their activities. The agreement also defines which activities and actions qualify as in-house matters and assigns them to the management’s responsibility.

Joint management

In principle, German law stipulates a system of joint management, under which various members collectively oversee the affairs of the GbR. Every step requires either the consent of all managers—in which case we talk about unanimous collective supervision—or partners can agree that, in the case of majority joint management, a majority decision is sufficient.

Limited management authority

When incorporating a GbR in Germany, the agreement is able to assign specific responsibilities to individual partners. For instance, each person’s authority could be restricted to particular duties or activities, often quantified by monetary limits: partners can authorize transactions up to a certain amount, while larger ones require the collective approval of every member.

Individual management

Another arrangement is individual management authority, allowing partners to act independently without obtaining prior consent from the others. But, the remaining members retain the right to object to such actions, while those entirely excluded from oversight hold no such right.

Interim management

Interim management can be necessary in instances requiring urgent steps to safeguard the partnership’s assets or address an imminent threat to the venture. In these situations, individual partners could take action without needing the others’ consent. The aim here is to prevent serious consequences resulting from the organization’s inability to act in an emergency. Typical examples of interim management include immediately repairing a burst water main at the company’s premises or defending claims in good time by filing a legal remedy subject to a fixed deadline.

What are the advantages of transferring management to one person?

Joint management often proves cumbersome in practice, as every participant must engage in each decision—either unanimously or by majority vote—which might hinder the GbR’s ability to operate efficiently on a daily basis. There are various upsides, therefore, to transferring management to a sole individual:

  • Faster decision-making processes: A single person can act immediately without spending hours or days seeking approval, speeding up routine decisions and enhancing the GbR’s responsiveness in daily operations.

  • Avoid barriers to decisions: If multiple people bear equal responsibility for supervision, then there is always a risk of clashes between different interests or points of view. Deliberations can greatly slow the process or, in the worst case, prevent any resolution from being reached. Individual management reduces the need for consensus and stops the business from grinding to a halt.

  • Clear authorities: Putting management in the hands of individuals creates defined structures. Clear divisions of authority eliminate overlap and ambiguity regarding who makes decisions and who represents the company externally, simplifying internal coordination and reducing conflicts among members. It also affirms a professional outward-facing appearance by clearly indicating to business partners who they can contact.

  • Increased efficiency: Another good reason to opt for single-person supervision is the potential for increasing efficiency. Individual management shortens decision-making pathways, avoids friction loss, and simplifies workflows. The real payoff comes when a situation calls for quick action, such as last-minute customer requests, contract negotiations, or unexpected market changes. In these situations, concentrating the capacity to choose the GbR creates the speed required to take advantage of opportunities and mitigate risks early.

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What is the difference between managing and representing a GbR?

Managing a GbR involves conducting all the steps required to run the company day-to-day to achieve the common goal. As a result, it encompasses all internal operations. That includes organizational choices on the use of resources and measures relating to ongoing work. To illustrate, management typically decides on procurement, execution of contracts, or hiring new colleagues.

Representing a GbR is not just about the internal workings of a company; it’s also on the external appearance of a business. It governs who is authorized to conclude contracts, issue declarations, or enter into legally binding obligations on behalf of the partnership.

Clear definitions are key; hence, management is about organizing the in-house operations of the business, while representation is about who can engage with outward parties. That means that a person who is responsible internally for oversight is not automatically authorized to advocate for it externally. Equally, a power of representation can be more or less restrictive than a management authority.

Who can represent a GbR?

External representation in a GbR governs who is allowed to conduct binding legal transactions. By default, each member shares joint authority to act for the partnership unless the agreement states otherwise, as representation rights derive from management authority. It means, generally speaking, every partner is equally entitled to conclude external contracts or issue binding declarations for the GbR.

Still, it often makes sense in practice to establish specific rules around designation. The partnership agreement is one way of giving particular people the power of sole representation or limiting such rights to multiple members.

This leeway is primarily relevant in terms of the legal consequences that representation entails. Anyone acting on behalf of the GbR undertakes a commitment not just for themselves, but for all partners. Given that each member bears personal and unlimited liability, having explicit rules on representation is foundational to minimizing risk.

How do you transfer the power of representation to nonpartners?

The GbR follows the principle of internal management: responsibility for running the company lies with the members themselves exclusively. While individual partners can be excluded from supervision by the agreement, revoking the management authority from all members and transferring it in full to an outside party is not permitted by law.

That said, in practice, many companies hire external specialists to tap into their expertise or reduce the members’ workload. The arrangement is formalized through a contract, allowing a third party to take on full oversight duties under a service or employment agreement. Such people act as appointed agents, empowered to run operations and represent the GbR externally.

Though from a legal standpoint, management remains with the partners in this case. They continue to bear complete responsibility and are personally liable for the decisions made. To a certain extent, the representatives engaged act on a “temporary basis” and within the framework of a contractually appointed power of attorney.

本文中的内容仅供一般信息和教育目的,不应被解释为法律或税务建议。Stripe 不保证或担保文章中信息的准确性、完整性、充分性或时效性。您应该寻求在您的司法管辖区获得执业许可的合格律师或会计师的建议,以就您的特定情况提供建议。

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