GbRs

GbR stands for Gesellschaft bürgerlichen Rechts, the simplest form of partnership in German civil law. A GbR is created when at least two natural or legal persons agree to pursue a common non-commercial or commercial purpose. It has no separate legal personality in many contexts and is formed by contract rather than a statutory act or notarization. In practice, a written partnership agreement is common to specify contributions, rights, and profit sharing.

Formation and operation are governed primarily by the contract and by provisions of the German Civil Code (BGB). Absent specific rules, the default position is that all partners participate in management and share profits equally. A contract can designate a managing partner or delegate duties to certain partners. Decisions typically require the consent of the partners, with the agreement detailing voting rights and thresholds.

Liability is a defining feature: partners bear unlimited personal liability for the obligations of the GbR. This liability is joint and several, meaning a creditor can claim satisfaction from any partner’s private assets, not just from the partnership’s assets. The GbR itself is not a shield against personal liability, which influences risk considerations and financing.

Taxation and accounting follow a transparent model. The GbR itself generally does not pay income tax; instead, profits pass through to the partners, who declare their share on their personal or corporate tax returns. The partnership may be required to file a tax return and, if it conducts a trade or business, may be subject to Gewerbesteuer (trade tax) with the tax burden ultimately borne by the partners.

Dissolution occurs by agreement, withdrawal of partners, or upon achieving the partnership’s purpose. GbRs are commonly used for small, informal collaborations, professional groups, or project-based ventures due to their simplicity and low setup costs, offset by the risk of unlimited liability.