German Private Partnership (GbR) / German Commercial Partnership (OHG)
The company forms described here are differentiated mainly in that a GbR is a company consisting of at least two shareholders and is subject to the regulations of the German Civil Code (BGB), while the OHG is additionally entered into the Companies Register and therefore as a trading company is subject not only to civil law but also the stricter commercial law regulations of the German Commercial Code (HGB).
Founding a GbR or OHG
A GbR must consist of at least two shareholders that can be natural or legal persons, or also other companies with legal capacity (e.g. OHG, KG).
Founding occurs by Articles of Association which is essentially free-form, i.e. it can also be completed verbally. However, it is always recommended to complete a written contract for the purpose of easier clarification of any possible disagreements between individual shareholders regarding the contract’s precise details.
An OHG must consist of at least two shareholders that can be natural or legal persons.
Founding also occurs by Articles of Association. Additionally, an entry in the Companies Register is required.
No minimum capital is required for either of these company types.
For both companies, after founding they must be registered for tax purposes at the jurisdictional tax office.
All shareholders are essentially authorised to manage the company’s business except if something different is agreed upon in the Articles of Association. The following may be agreed upon in the Articles:
Transfer of management to one or more shareholders
All-member representation which means that the shareholders authorised to manage must do so together (e.g. for a purchase decision, all managers must agree to the purchase).