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A long-term commitment of partners in a partnership (GbR) may be inappropriate

September 20, 2016 | Author: | Posted in INTERNET

An overly long commitment of partners in a partnership organised under the German Civil Law (GbR) that arises out of the memorandum of partnership of the GbR, can be inappropriate in some circumstances.
GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Bremen, Nuremberg and London explain: The Federal Court of Justice (BGH) ruled in the court decision dated 6 November 2012 (Ref. no.: II ZR 176/12) that a commitment of partners by a memorandum of partnership of a GbR binding the partners to the partnership for a longer period of time may be inappropriate in some circumstances.
A long-term commitment of the partners to the partnership could lead to a limitation of the partner’s options for termination, which would hence be invalid. Should the memorandum of partnership determine the commitment of the partners to the company, this should be manageable time-wise and should not inappropriately restrict the personal and economic freedom of the partner.
The question of how the timeframes of a commitment of the partners within a company are defined has to be decided on a case-by-case basis. For the assessment process, in addition to the legitimate interests of the individual partner, the structure of the company, the nature and extent of the obligations arising from the participation in the company, as well as the interest in the long-term existence of the company deriving from its purposes shall also be considered.
The partnership organised under the German Civil Law, also known as BGB-Gesellschaft, is the most basic form of a partnership. There are therefore only a few mandatory legal requirements for the BGB Gesellschaft GbR germany and it is up to the partners to shape the company through its memorandum of partnership.
Thus, the memorandum of partnership, for example, is not bound to any specific form and many GbR provisions are not obligatory. It is in this flexibility that, on the one hand, there is an incentive, but on the other hand also the risk when establishing a partnership organised under the German Civil Law, since many opportunities also pose many risks. That is why it is so important to place the interests of a company even before its establishment in the hands of experienced lawyers.

For more information about BGB Gesellschaft GbR germany please visit the website.

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