Representation and management in a civil law company (GbR) according to new law: What you need to know!

Introduction: The challenges of management in the GbR

The civil law partnership (GbR) is a popular legal form in Germany, especially for smaller companies, freelancers and project groups. Despite its flexibility and simplicity, the GbR presents some legal challenges in terms of management and representation. This is primarily due to the so-called Overall management authority and the principle of Self-organization.

But what does that mean specifically? In a GbR, all shareholders are generally entitled and obliged to manage the business together. In contrast to corporations (e.g. GmbH or AG), where an external managing director can be appointed, with GbR the management is usually the responsibility of the shareholders themselves. This can lead to difficulties, especially in larger or more complex GbRs, especially if quick decisions are necessary or the shareholders pursue different interests.

The big question: Can third-party management also be established in the GbR, as is usual with corporations? What effects does the representation regulation have on the liability of the shareholders? And how can conflicts be avoided? This article offers you an overview of the current legal regulations and shows you solutions on how you can organize your GbR in a legally secure and efficient manner.

1. New legal regulations on representation and management authority from January 1, 2024

From January 1, 2024, new legal regulations will apply to GbR in Germany, in particular Power of representation and the Management regarding. These changes attempt to modernize the legal framework of the GbR and adapt it to the needs of practice. This results in the following important innovations for the shareholders of the GbR:

1. Overall management authority as standard
   In principle, all shareholders are jointly authorized to manage the company. This means that important decisions can generally only be made by mutual agreement. However, a deviation from this is possible.

2. Introduction of individual management authority
   What is new is that individual shareholders can now also have individual management authority without having to explicitly conclude a partnership agreement. The legal possibility of individual management is intended to ensure greater flexibility and facilitate operational processes.

3. Bound to the right of representation
   With the new regulations, the Bonding of the shareholders to the rights of representation strengthened. This means that individual shareholders can no longer easily be restricted in their power of representation by the other shareholders.

4. External management in the GbR: What is allowed?
   Unlike in the past, it is now possible to contractually stipulate external management. This can be particularly advantageous if the shareholders themselves do not want to be involved in operational management or if external expertise needs to be brought in.

Problem points: However, the new regulations could also confusion lead. The shareholders must therefore clearly distinguish between the Management and the Representation differentiate. While management concerns day-to-day operational business, representation concerns external relations, i.e. who legally binds the company externally. Failure to provide clarification may result in an unwanted Liability of the shareholders lead.

2. The partnership agreement as a solution: regulation of management authority

One of the most important ways to create clarity and legal certainty with regard to management and representation authority is Social contract. A well-drafted partnership agreement is the backbone of every GbR and can modify the legal regulations in many ways and adapt them to the specific needs of the shareholders.

The following regulations should definitely be taken into account:

1. Individual management authority
   It may make sense for management to be transferred to individual shareholders. This should be clearly stated in the partnership agreement to avoid later misunderstandings.

2. Appointment of an external manager
   The partnership agreement can stipulate that an external managing director will manage the business of the GbR. However, it should also be regulated how this person can be appointed and, if necessary, dismissed.

3. Distribution of representation rights
   The contract should regulate who represents the company externally. A distinction can be made between overall representation (all shareholders together) or individual representation.

4. Limitations of Liability
   In order to limit the personal liability of the partners, the contract should contain detailed liability provisions. This particularly concerns the Internal liability the shareholders among themselves.

3. Advantages of a comprehensive regulation in the partnership agreement

A comprehensive partnership agreement offers numerous advantages:

• Clarity and legal certainty
  Conflicts between the shareholders are avoided through detailed regulations.

• flexibility
  The contract can be adapted to individual needs, e.g. B. for the appointment of an external managing director.

• Reduced liability
  Clear representation regulations reduce the risk of unwanted liability.

• Facilitated decision making
  The introduction of individual management authority makes operational decision-making easier and saves time.

• Protection against misuse
  A well-drafted contract protects against misuse of representation rights.

4. Conclusion and recommendation: Get support!

The new legal regulations for management and representation in the GbR offer many opportunities, but also involve risks. A well-structured partnership agreement is essential to minimize liability risks and ensure the company’s ability to act.

If you have any questions about management authority, representation or the drafting of a partnership agreement, I am at your disposal Lawyer and specialist lawyer for commercial and corporate law gladly available. With my comprehensive expertise in corporate law, I support you in organizing your GbR in a legally secure and efficient manner.

Don’t hesitate and get in touch now to set up your GbR in the best possible way! Write me an email or arrange a consultation appointment directly.

This article does not represent specific and individual legal advice, but rather only provides a rough initial overview of the legal matter described. In particular, the statements are exemplary and do not claim to be complete. You can only obtain legal certainty for your specific case constellation through coordinated examination and advice from an expert lawyer. Especially since the legal situation can change over time.

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