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Legal Forms

General framework conditions

Commercial and corporate law states the corporate forms (legal forms) available to the entrepreneurs by law. Invention of a new legal form and introducing it on the market is not possible. The basic structures stated by law can however be partly amended and thus adapted to individual requirements.

On the following pages, the characteristic features of various legal forms of organisation are shown in an overview.

Finally, you should clarify the legal form which is correct for your enterprise with a consultant in your individual case.

One peculiarity of German corporate law is the distinction between “small industrial unit” and “commercial operation”. This distinction only plays a role in one-man businesses and not in legal entities.

Commercial enterprises have to be entered in the Register of Commerce. As a matter of principle, the German Commercial Code (HGB) is applicable to them.
Non-commercial enterprises can be entered in the Register of Commerce voluntarily and are then treated like businessmen. If they do not make any use of this possibility, then they are subject to the German Civil Code (BGB) and not the HGB as a matter of principle as regards their legal transactions.

The question of whether an enterprise is of a commercial nature is based on whether the business operation requires a commercial set-up as regards its nature and scope (§ 1 HGB). Decisive criteria are primarily the turnover, the number of employees, the amount of operational assets, the loan volume as well as the number of locations or branch establishments. Turnovers of more than Euro 250,000 are generally an indication for the fact that the framework of a small industrial unit has been exceeded.

A small industrial enterprise can be run by a single person as a small industrial entrepreneur or by a civil-law corporation in the form of a civil-law partnership  (GbR). Commercial one-man companies are a single merchant (e.K. = e.Kfm, male or e.K. = e.Kfr., female), a general partnership (oHG), a limited commercial partnership (KG) and a one-man company with limited liability (GmbH & Co. KG, GmbH & Co. oHG).
Recht und Steuern