rechte, zweite Spalte


In addition to the above, German law provides for some other forms of association which are not really suitable for foreign investors. Nonetheless, for the sake of Vollständigkeit, they are listed here:

  1. in civil law
    1. registered association / club (eingetragener Verein - e.V.) which is restricted for non - commercial purposes, e.g. sports club or social movements
    2. unregistered association (Verein): because of historical political reasons, all German trade unions are organised as unregistered association
    3. Foundation (Stiftung): to a certain extend, it has some similarity to a trust
    4. Civil law partnership (Gesellschaft bürgerlichen Rechts): a great number of consortiums for all kind of purposes (syndicated bank loans, construction / building consortiums) are organised in this form because of the enormous flexibility, the enormous freedom to determine the partners' rights and obligations, the total absence of any formalities of its constitution; it is noteworthy that all partners are liable without any limitation for the liabilities of the company;

  2. in commercial law
    1. unlimited partnership ("Offene Handelsgesellschaft" - OHG) which is very similar to the civil law partnership; however, it must have a commercial or industrial object, a certain economic size with regard to turn over, staff, and accounting procedures, a name (Firma) under which it operates, and must be registered with the trade register; all partners are liable without any limitation for the liabilities of the company.
    2. limited partnership ("Kommanditgesellschaft" - KG) the only difference to the unlimited partnership being that there has to be at least one partner who's liability is limited to a fixed amount
    3. legal entity plus limited partnership, such as the famous GmbH & Co KG: in this case, the partner who's liability is unllimited, is replaced by a legal entity, in most cases by a GmbH; however, other solutions to serve very selected purposes are known, such as Foundation or even AG as unlimited partner. A typical situation may be sketched as follows:
      The main advantage of this kind of company is a speciality of German tax law: legal entities are liable to corporation tax on their own income, whereas the profit (and loss!) of partnerships is directly attributed to the individual partners where it increases / decreases their income. Thus, the partner may at the same time profit form the tax advantage of setting off losses in the company against other income, and limit his liability to debts of the company to a chosen amount.

All those kinds of companies do not really meet the average needs of a foreign investor, but may have some tax advantages in very specific situations.