Civil Law Partnership (GbR)
Learn everything important about the Civil Law Partnership (GbR). This article explains the characteristics, advantages and disadvantages, as well as the liability regulations of this legal form.
Definition of the Civil Law Partnership (GbR)
The Civil Law Partnership (Gesellschaft bürgerlichen Rechts, GbR) is a partnership regulated under the German Civil Code (Bürgerliches Gesetzbuch, BGB). It is formed by the union of at least two partners to pursue a common purpose.
Characteristics of the GbR
- The GbR is the simplest form of partnership.
- It is established through a contract without formal requirements and does not require registration in the commercial register.
- Partners have unlimited and joint liability with their private assets.
- The GbR has partial legal capacity and can acquire rights and incur obligations under its name.
- Management and representation are carried out jointly by all partners unless otherwise agreed.
Liability in the GbR
Liability is a key aspect of this legal form:
- Partners have unlimited and joint liability for the partnership’s obligations.
- Creditors can directly pursue individual partners.
- Partners are liable with their private assets.
- Liability limitation is not possible.
Formation of a GbR
Forming a GbR is straightforward and requires only a partnership agreement, which can also be concluded orally. However, a written agreement is recommended and should address the following points:
- Purpose and object of the partnership
- Contributions and obligations of the partners
- Management and representation
- Profit and loss distribution
- Duration and dissolution of the partnership
Registration in the commercial register is not required.
Advantages and Disadvantages of the GbR
Advantages:
- Simple and quick formation
- No minimum capital requirements
- Flexibility and fast decision-making
- Low bureaucratic effort
Disadvantages:
- Unlimited and joint liability of the partners
- Challenges in raising equity capital
- Difficulties with succession planning
- No clear separation between partnership and private assets
Conclusion
The GbR is particularly suitable for smaller projects and collaborations where partners are willing to accept unlimited liability and maintain a close trust relationship. It offers a simple and flexible way to cooperate but also demands a high level of responsibility and risk from the partners.
Other legal forms can be found in the articles on AG, GmbH, GmbH & Co. KG, KG, and OHG.