CORPORATE Partnership-register & Co.: What the German act on modernization of partnership law (MoPeG) means for civil partnerships (GBR) from 01.01.24

The Civil Partnership (GbR – short for Gesellschaft bürgerlichen Rechts) is German law’s most popular form of parnership. After all, no share capital is required to set it up. A notarized partnership agreement is also not required, nor is an entry in the company register.

However, the MoPeG (“Gesetz zur Modernisierung des Personengesellschaftsrechts” – Act on the Modernisation of Partnership Law) is now comprehensively modernizing GbRs as of 01.01.2024.

But what does this mean for the GbR – for new formations and existing civil law partnerships?

Partnership gets a legal shape more qualified.

As a partnership, the GbR must be regulated in great detail by bylaws, especially compared to corporations. Although jurisdiction clarified many legal issues in connection with the GbR by many years of case law, these principles still need to be enshrined. As this needs to reflect the popularity and importance of the GbR adequately, the GbR is now to be (more clearly) regulated by law in many respects.

As civil law partnerships have been entirely non-transparent to date – especially about the shareholder structure – this step is welcome to prevent money laundering and protect contractual partners.

GbR with legal capacity – now also by law!

While the legal capacity of the GbR was controversial for a long time, jurisdiction has recognized legal capacity for some time now due to supreme court rulings by the Federal Court of Justice (BGH). However, the German Civil Code (BGB) has so far been silent on the legal capacity of the GbR. This structure will change from 2024 onwards: In the future, the BGB will distinguish between external GbRs with legal capacity and internal GbRs without legal capacity, thus defining legal capacity in principle by law.

About the existence of the GbR, another essential aspect will change: Whereas previously, the GbR was dissolved upon the death of a partner without a continuation clause in the GbR agreement, in the future, the GbR will be continued with the remaining partners. Heirs will be compensated financially if there is no continuation clause.

GbR company register coming: Does a GbR have to be registered?

The GbR is the most uncomplicated form of company under German law. For this reason, it is a company form often chosen for various purposes: from small companies to communities of liberal professions to wealthy family offices – the GbR can be established everywhere.

But does it have to be entered in a public register? Until now, this was not necessary.

That is why there was initially a great deal of skepticism when it became public that there would be a so-called GbR register in the future. However, a GbR does not have to be entered in the familiar commercial register, in which, for example, GmbHs are established in the future.

In the future, there will be a separate company register. A GbR can register here and is then a so-called “eGbR,” i.e., a registered GbR. However, not every GbR has to register; in fact, no GbR is legally obliged to register, even though the legal changes will now come into force on 1 January 2024.

De facto compulsory registration for some companies

In practice, however, the situation is different: Companies that hold certain rights must be entered into the company register so that their rights can be changed.

This need sounds abstract at first, but is of great importance in the everyday life of companies. For example, if a GbR owns real estate, holds shares in corporations (GmbH, AG), or is the owner of IP rights, e.g., patents or trademarks, the company can only dispose of these rights with legal effect in the future if the GbR is registered.

With an entry in the GbR register, a GbR can effectively act in the future regarding these rights and can sell or encumber real estate or company shares or dispose of IP rights.

Time to act!

In addition to the points mentioned here, the new GbR law will bring further changes. However, none of the changes are mandatory for the GbR.

Nevertheless, clarifying the individual need for action and adaptation for a GbR with professional support makes sense. This consequence is significant for civil law partnerships that own Property or

• IP rights such as trademarks, patents, designs, or shares in corporations
• or want to acquire such rights. Then, there is an urgent need for action.

It must be clarified promptly whether or not an entry in the company register has already been initiated. If not, it is now high time to act, as the MoPeG, with all its GbR law changes, will come into force on 01.01.2024.