Draft Bill on the Modernization of the Law on Partnerships

On November 18, 2020, the German Federal Ministry of Justice presented a draft bill for a law to modernize the law on partnerships (MoPeG), which is to be passed by the Bundestag during the current legislative period, i.e. by fall 2021 at the latest. The aim of the MoPeG is in particular to adapt the statutory regulations governing the partnership under civil law (GbR) to the needs of practice and the established case law of the Federal Court of Justice on the legal capacity of this form of company. In the future, the partnership under civil law, often also referred to as a civil law partnership (BGB-Gesellschaft), will therefore be designed as the basic form of all legally capable partnerships and will be provided with the possibility of being entered in a register of companies to be created specifically for this purpose.

The newly planned register of companies is to be based on the commercial register in terms of content and function, so that entries in the register of companies enjoy a kind of public faith. In principle, the entry of a civil law partnership in the register of companies should be voluntary. Only for those civil law partnerships that are to be registered in the land register as owners of real property or that participate in legal transactions as shareholders or partners of a limited liability company, prior registration in the companies register is mandatory in order to meet the need of legal transactions for greater security with regard to the existing liability and representation relationships of the partnership. Civil law partnerships entered in the register of companies are then given the addition eGbR in legal transactions.

A further focus of the reform of the partnership law is the planned opening of commercial partnerships, i.e. general partnership (OHG and limited partnerships (KG), for the joint exercise of liberal professions by the partners. By the choice of the legal form of a GmbH & Co. KG, these professional groups can therefore in future largely exclude personal liability for the company’s obligations, provided that professional law reservations, such as special insurance obligations, are fulfilled.

In addition, according to the draft of the MoPeG, the corporate assets of partnerships in the future will no longer be allocated to the entire hand of the partners as so-called Gesamthandsvermögen, but to the partnership itself. In the future, the company will therefore be liable for corporate liabilities.

Finally, a major innovation concerns the right of lack of resolution in commercial partnerships, which will be based on stock corporation law in future and will be changed from the declaratory model to the rescission model. This means that partners of an OHG or KG will in future be able to assert deficiencies in resolutions by way of an action for rescission directed against the company, unless the resolution is already null and void from the outset due to a particularly serious deficiency.

However, the reform of the partnership law is not to come into force until 01.01.2023, in order to give the federal states the necessary lead time to set up the newly planned company register.