The Modernization Act for partnerships (MoPeG) introduces a series of legal changes to the company civil law (GbR). They should be valid from 2024. The approximation of laws to the existing case law for some time is in the foreground. Thus, it is envisaged that a GbR, which wants to interact with third parties for business as a foreign company, must in future be registered in a new company register. This also applies in particular to a GbR which has real estate, trademark rights or shares in a limited company. According to the MoPeG, this form of GbR is to bear the name Registered Company Civil Law (eGbR). Further changes are envisaged with regard to the company assets, the possibility of determining a seat deviating from the administrative seat and the provisions of the articles of association. Furthermore, the MoPeG also revised many regulations for decision-making, management and representation in a GbR.

In the summer of 2021, the Bundestag and the Bundesrat adopted a law on the modernisation of partnership law (MoPeG). We already reported on the speaker's throw before. The MoPeG is a very comprehensive amendment law that affects many legal aspects. Overall, the MoPeG provides for changes to 136 legislation. For example, the MoPeG regulates amendments to the Commercial Code, which affect the OHG and the KG. But in this article we should only be interested in those changes that affect the company civil law (GbR). These changes alone are many and far-reaching. In fact, however, most of the MoPeG changes take place where there was already a general reference to partnerships in completely different legal provisions (for example, the Environmental Audit Act, the Party Act, the Wine Act). In all these cases, the reform of partnership law made it necessary to clarify the term partnership used there.

In addition, it was the intention of the legislator to revise the legislation, especially with regard to the GbR. Over time, there have been some changes in jurisprudence and practice, which have hardly met the previous regulations. For example, the GbR has now been defined as a foreign company with legal capacity for a certain period of time.

The changes required by the MoPeG are to be valid for the first time from 2024. However, in order to give the partnerships concerned sufficient opportunity to adapt to the changes, which are sometimes considerable, they have refrained from immediately implementing the innovations. However, this is only one of several reasons that are responsible for the MoPeG not taking effect until 2024. But more on that in a moment.

So let’s go into the individual changes that the MoPeG provides for the GbR. Many of the changes now cast into law form have already been relevant in practice by case law for some time.

Through several judgments, the Federal Court of Justice has ruled that the GbR is a company with legal capacity. This means that it, like other companies, can acquire and exercise its own rights. But so far there have been no regulations in the Civil Code (BGB), which contains the essential provisions of the GbR. The MoPeG now changes this circumstance by granting the GbR legal capacity.

However, this should only apply conditionally. Because there should still be the possibility that a GbR can pursue its goals without its own rights. But it is then a pure domestic society. Therefore, in the future, a distinction will be made between a GbR without its own rights and a GbR with legal capacity, which can also establish legal relations with the outside world. And since the latter is associated with publicity in other partnerships, this should also apply to a GbR in the form of a foreign company in the future.

This leads to the creation of a new company register in which a GbR must register under certain circumstances. The conditions apply if a GbR has real estate and this is in the land register, has trademark rights or wants to acquire shares in a limited company. In addition, a GbR in this case must bear an addition in its designation. It is then called a registered civil society. However, the MoPeG also allows the abbreviation eGbR.

If, however, no natural persons are involved as shareholders in a GbR, then the GbR must include a reference to the limitation of liability in its designation. For example, they could then be called GbR (limited liability). However, the MoPeG does not give any specific instructions on this (§ 707a paragraph 2 sentence 2 BGB new version).

Similar to the commercial register, the district courts will also keep these new company registers in the future. By the way, this is another reason why the MoPeG only becomes valid from 2024. Because the changes for this also require time. Finally, the already existing GbRs have to cope with the new legal situation.

If you want to enter a GbR in the new company register, then this is only possible in a publicly certified form (§ 707b number 2 BGB new version in conjunction with § 12 HGB). This is intended to ensure the publicity of GbR. For example, a notary can verify the identity of the persons with regard to the registration of the shareholders in the register. In this respect, the MoPeG brings the GbR into line with the legal situation that has already applied to other partnerships. This puts an end to the special status that the GbR had in external relations so far: it was not transparent for third parties.

When entering a GbR in the company register, your name, contract seat with address and personal data about the shareholders must be entered. In addition, the company register should also inform about the representative power.

In this context, it should be mentioned that a GbR must also disclose information about its economic beneficiaries in the Transparency Register in the future, if the relevant conditions are met. This step is therefore also accompanied by an entry of a GbR in the company register. The GbR fulfils the same obligations as other companies.

From 2024, a GbR will only be able to enter real estate in the land register if it is already registered in the company register. This also applies to other rights in this regard, such as those associated with land register registrations. This obligation concerns both existing companies under civil law with real estate ownership and those whose establishment takes place after 31.12.2023.

Another important point for all civil law companies is the granting of contractual freedom by the MoPeG. Although this already applied so far, the regulation is now contained in § 708 BGB new version. It therefore stipulates that the shareholders of a GbR can freely design the articles of association provided that they comply with the legal framework conditions.

This also includes that the shareholders of a GbR can define a contract seat deviating from the administrative seat as the seat of the company (§ 706 BGB new version). This is therefore a place that may differ from the actual administrative seat where GbR conducts its business. However, in the case of registered companies under civil law, this is only possible for places in Germany. In this way, MoPeG enables a GbR to do business through a formal contractual seat in Germany and an administrative seat abroad.

Another aspect with regard to contractual freedom can be mentioned in the company law regulation for decision-making. Although § 714 BGB in its new version generally provides for the unanimity principle, the shareholders may deviate from this in the articles of association.

The case is similar with regard to the management and the power of representation. Here, too, the law provides, on the one hand, for joint management and power of representation, from which, however, one may deviate in the articles of association (§§ 715, 720 BGB new version).

Furthermore, the MoPeG also contains new regulations regarding the company assets and the share of the shareholders of a company under civil law. So far, the BGB considers the company assets of a GbR as total assets. This is now to be changed by the MoPeG. Because a GbR should have its own company assets in the future, without there being any common assets of the shareholders, whatever the bond may be.

In this context, the transfer of a share in a GbR should also be considered. In doing so, the acquirer of shares receives only a share in the company, instead of, as before, also becoming a joint owner of the entire assets of GbR on an equal footing with the other shareholders. This also applies in the case of an inheritance, provided that provisions are contained in the social contract.

This brings us to the next change that MoPeG has in store with regard to the GbR. Because unlike in the past, the existence of the GbR should in principle continue in the future also by the departure of a shareholder. Until now, a social agreement had to be reached. However, from 2024 onwards, the continuation of the GbR will only be considered legally secure if more than one shareholder remains in the GbR. However, if the penultimate shareholder leaves the GbR, the company ceases to exist. A continuation with only one shareholder is thus just as excluded as the establishment in such a constellation.

Thus, if a shareholder leaves the company (by leaving or otherwise), his shares are transferred to the remaining shareholders. For this purpose, the MoPeG has thus met the same specifications that are also applied to an OHG.

MoPeG changes two other regulations in terms of termination. On the one hand, shareholders have the right to extraordinary termination when they reach the age of majority. On the other hand, there is an extraordinary right of termination if a GbR was founded for a certain time. If a shareholder violates, neglects or is unable to fulfil his obligations under company law, then other shareholders have the right to terminate extraordinary. No notice period is then provided.

Both regulations were already included in the BGB (§ 723 BGB old version). But the revision of the BGB required a new wording for these regulations. Therefore, we will find this in a somewhat more precise form in § 725 BGB new version in the future.

Some significant changes to the liability of the shareholders of a GbR are also part of the MoPeG. Where until now the acting shareholder himself was liable, from 2024 a GbR shareholder as well as an OHG shareholder should be personally liable for liabilities of the company. As a shareholder of an already existing GbR, one should therefore be particularly aware of the new joint and several liability. Incidentally, this also applies to liabilities that GbR already had at the time a new shareholder joined. And even after the departure of a shareholder, shareholders are liable for liabilities that originate from the time of membership. However, the liability is then limited to five years.

Here too, the MoPeG has completely revised the previous laws in the BGB, so that the new provisions are now codified in other paragraphs (§§ 721, 721a, 728b BGB new version).

Since the GbR now shares a lot in common with the OHG through the MoPeG, it is hardly surprising that the reform law also provides for regulations on how to change the shape of the GbR. For this purpose, the MoPeG regulates this change of status in detail. After all, it may be that two register courts are involved in such a status change. On the one hand, the previous company register must enter a status change note, which then shows that the GbR has changed its legal form as well as its name or company and its registered office. With the implementation of this status change note, the register court which was previously competent informs the register court which is now provided for this purpose about the status change. Thus, the company continued under another legal form can now also be registered in the register there.

This legally regulates both a change of legal form into an OHG and a limited partnership or partnership company. However, when changing to a limited partnership, further special features regarding the general partner and the limited partner are included in the MoPeG. After all, now only the general manager continues personal liability in the limited partnership. However, the current limited partner remains personally liable only for the liabilities incurred by GbR until the change of status for a period of five years. Thus, this regulation of the MoPeG is exactly the same as that which would also apply if a shareholder left the GbR.