Establishing a Partnership in Germany (GbR)

The Gesellschaft bürgerlichen Rechts (GbR) is one of the fundamental forms of partnership under German law. It can be used where two or more persons or entities agree to pursue a common purpose together and is frequently suitable for comparatively straightforward joint ventures, professional activities, investments and other forms of co-operation.

The legal framework governing the GbR was comprehensively modernised with effect from 1 January 2024. German law now expressly distinguishes between a GbR that itself participates in legal transactions and a GbR that serves solely to organise the relationship between its partners.

How does a GbR work?

A GbR is established by a partnership agreement (Gesellschaftsvertrag) under which its partners agree to promote a common purpose in the manner determined by that agreement. If, according to the common intention of its partners, the partnership is intended to participate in legal transactions itself, it can acquire rights and assume obligations in its own name.

The partnership agreement is therefore central to the structure of the GbR. It should clearly regulate matters such as the purpose of the partnership, contributions and participation of the partners, management and representation, allocation of profits and losses, decision-making and the consequences of a partner joining or leaving the partnership.

Compared with a corporation, a GbR can provide considerable contractual flexibility. At the same time, the personal position and potential liability of the partners must be carefully considered before this legal form is selected.

Does a GbR have to be registered?

German law provides for a partnership register. Partners may apply to have a GbR entered in this register. Whether registration is necessary or appropriate depends on the intended activities and assets of the partnership and should therefore be considered when setting up the structure.

How we can assist

We advise German and international clients on establishing and structuring a GbR and on whether this comparatively flexible partnership form is suitable for their intended activities.

We can prepare or review the partnership agreement and develop appropriate provisions concerning contributions, management, representation, profit distribution, decision-making and the admission or withdrawal of partners.

Where registration is intended or required for the proposed structure, we can also assist with the necessary registration arrangements. For cross-border projects, we can help integrate the German partnership into the client’s wider international corporate or investment structure.