partnerships cannot act legally themselves, but must be represented. Then the question arises as to how the representation of the partnership is legally possible and works. This and what applies if one partnership partner acts against the will of another, as well as the attribution of any fault of the partners to the partnership we in our contribution.

Partnerships, like corporations, cannot act independently in legal transactions. Rather, they must be represented by a natural person when concluding transactions. We clarify how this is legally possible. How this works, for example, in the company with limited liability (GmbH) as a corporation, we have explained in one of our other contributions.

In addition, an employee or a partner of the partnership may cause damage to an outside third party. Then the question arises whether the fault can be attributed to the partnership or the other co-partners. This is also what we are dealing with in the following.

2.1.1. Representation by shareholders

First of all, we explain how the open commercial company (OHG) and the limited partnership (KG) act externally. In accordance with the above justification, they must be represented vis-à-vis the business partner in order to be effectively legally obliged to him. OHG is represented by the shareholders in accordance with § 125 (1) HGB. According to § 161 paragraph 2 HGB, this also applies to the KG, as this standard states the corresponding validity of the rules on the OHG for the KG. However, it should be noted that the limited partner is not authorised to represent according to § 170 HGB. The shareholders are in principle solely entitled to represent. However, the articles of association may stipulate that only several partners together represent the partnership. This is called genuine overall representation according to § 125 paragraph 2 HGB.

2.1.2 Representation by the authorized representative

OHG and the KG can also be represented by an appointed authorized representative. If, according to the articles of association, the authorized representative can only act together with a shareholder, there is a case of inauthentic overall representation within the meaning of § 125 (3) HGB. Then the extent of the representative power depends on the strongest link, i.e. on the power of the shareholder. Accordingly, the power of representation is not limited according to § 126 HGB, so that they can also conclude land sale contracts or land sale contracts.

However, it should be noted that the representation of the OHG must always be possible without the consent of the authorized representative. Otherwise, society is dependent on someone who is not a shareholder, which is contrary to the principle of organic representation. It must therefore be ensured that the partnership can also be represented by its bodies, i.e. the shareholders. The essence of a partnership is immanent that it is represented by at least one unlimited partner, who accordingly also bears full personal responsibility for the company. In the case of a GmbH, on the other hand, the managing director does not have to be a shareholder of the GmbH at the same time. Then there is a so-called external manager.

2.1.3 Representation by other third parties

Of course, OHG and KG can also represent other third parties. The representation can on the one hand take place in accordance with the general rules of the civil deputy, i.e. in accordance with §§ 164 ff. This requires that the actor makes his own declaration of will in the foreign – i.e. in the name of society – and acts within his representative power. Then the declaration of intent made by the representative works for and against the society. On the other hand, a power of action within the meaning of § 54 HGB or the representative power of the shop employee according to § 56 HGB are also considered.

If the company does not require a commercial enterprise set up according to type and scope and is not registered in the commercial register, then a company under civil law (GbR) exists. According to the overwhelming view, the GbR has legal capacity. However, the GbR must also be effectively represented so that a declaration of intent for and against it can apply. According to § 714 in conjunction with § 709 BGB, the shareholders of a GbR are, however, in principle only entitled to full representation.

Therefore, the power of representation could be absent if only one shareholder acts alone. However, §§ 714, 706 BGB can be contractually cancelled, which can also be done implicitly among the shareholders. The latter will often be assumed, since the operation is usually also to enter into transactions if one of the shareholders is not on site. Therefore, there will generally be no lack of representative power if a shareholder of the GbR acts alone, so that the GbR is also effectively represented by a shareholder.

By third parties, which are therefore not shareholders, the GbR can be represented according to the general civil deputy rules according to §§ 164 ff.

But it is questionable how the situation is to be assessed if one shareholder acts against the will of another. In the social contract, for example, a real overall representation could be agreed, according to which two shareholders must always act together. However, these two shareholders can act against the will of the other shareholder. It is questionable what then applies. The contradiction of a co-shareholder only has effects in the internal relationship. In external relations, however, it does not lead to a restriction of the power of representation, so that the treaty is effectively concluded in this respect.

Actors of a partnership can harm others. For example, an employee of the partnership may make a mistake in the performance of his work, as a result of which the customer suffers damage. However, the same can also happen to a partner of the partnership. The question then arises as to who is actually liable for this. This depends on whom the fault of the actor can be attributed. For example, the actor, the (other) partners or the partnership itself would be considered. However, it is then necessary to clarify on what basis the fault is attributed.

The problem in the context of fault attribution is that partnerships are legally competent, but cannot act culpably themselves as pure thinkers. In the case of a corresponding attribution standard, however, the partnerships may be attributed the third-party fault.

4.2.1. Attribution of the partner’s fault

The derivation of a corresponding attribution standard for the fault of a partner to the partnership is, however, controversial.

Sometimes it is represented that the attribution takes place in accordance with § 278 BGB. This should also apply if a shareholder causes the damage, since the latter acts to fulfill a contractual liability. In fact, the attribution of the shareholder’s behaviour to the company is more about attributing one’s own fault, since the company is one of the shareholder’s. However, § 278 BGB regulates the attribution of the foreign fault. § 278 BGB also applies solely in the contractual area. In the area of tort – i.e. the general liability for damages, which applies regardless of a contract – § 278 BGB does not apply. The attribution in the area of the unlawful act can also not take place according to the norm of § 831 BGB, since the shareholder is not an assistant of the company due to lack of instruction. Therefore, the attribution of § 278 BGB has gaps, especially in tortious damage claims.

The misconduct of a shareholder can be attributed to the partnership rather analogously § 31 BGB. The analogous application is necessary, since § 31 BGB is designed as an attribution standard for the fault of a board of directors to its association. However, the analogy is only possible if there is an unplanned regulation gap and comparability of the situations. Since partnerships like the association have legal capacity, they are comparable to an association. Therefore, comparable situations exist when attributing fault to an association and a partnership. Since § 278 BGB and § 831 BGB cannot justify the attribution in the tortious area (see above), there is an unplanned regulatory gap. In the application of § 31 BGB analogously, an attribution in the area of the unlawful act would also be possible. Consequently, the attribution of fault via § 31 BGB is preferable, so that the company is attributable to misconduct of the shareholders and is liable accordingly.

The causer of the damage will usually be an employee of the partnership. If he causes damage, he acts as an agent, because he fulfills a third party liability. Therefore, the requirements of § 278 BGB are fulfilled. The fault is therefore attributed to the company according to § 278 BGB. In the delicate area, the attribution takes place on the basis of the instruction according to § 831 BGB.

4.3.1. General liability of the partners for liabilities of the partnership, § 128 HGB

If a shareholder has caused the damage, he is liable for damages due to his own actions anyway. In addition, however, his fault or also the fault of an assistant involved could be attributable to the other co-partners. The shareholders of an OHG are liable according to § 128 sentence 1 HGB for the liabilities of the company. Since, as explained above, both the fault of the partners and the fault of any employees are imputed to the partnership, the partnership is liable. Consequently, the other shareholders must also pay for this in accordance with § 128 sentence 1 HGB. Therefore, no special attribution is necessary. The shareholders of a GbR are also liable for the liabilities of GbR, but only by analogy § 128 HGB. On the other hand, the standard of § 128 sentence 1 HGB on § 161 paragraph 2 HGB directly applies to shareholders of a limited partnership.

4.3.2. Problem: Liability of shareholders also for tortious liabilities

Only controversial is whether the shareholders are also liable for tortious liabilities of the company according to § 128 sentence 1 HGB. This rejects a view. It is pointed out that, in view of §§ 15, 176 HGB, there can be no trust in the personal liability of the shareholders in the event of an unlawful act. No one should, while he is injured, have causal trust that someone is personally liable as a partner. This trust exists exclusively in contractual obligations, in which one thoroughly checks beforehand whether one really wants to conclude a contract with the business partner. Accordingly, the damaging act should be attributable to the shareholders solely by analogy to § 31 BGB. However, this means that the shareholders are only liable with their share of the company’s total assets. Unlimited liability should only occur if a shareholder cannot prove that he has not shortened the total assets from the time the claim arises.

This view results in a limitation of liability and a constructed duty of information for the shareholders. This blurs the boundaries between the individual forms of society. From these limits, however, a believer emanates. He thinks that the shareholders of an OHG are personally and fully liable. Otherwise, there would be a GmbH or a KG. This is precisely why § 128 HGB creates the ancillary liability of the shareholders. In addition, OHG may not have a sufficient liability basis because, unlike a GmbH, there is no share capital and the shareholders have access to the entire company assets. The protection of creditors therefore requires § 128 sentence 1 HGB also to apply tortious claims. The wording of the law also speaks for this. This does not differentiate between tortious and contractual claims. Accordingly, the latter view is preferable. Accordingly, the shareholders of an OHG are fully and personally liable for the company’s tortious liabilities.