MoPeG Law Modernizes Partnership Law in Germany

Germany's new Act on the Modernization of Partnership Law (MoPeG), effective January 1, 2024, introduces comprehensive amendments to civil law partnerships (GbR) and modernizes other partnership forms. This update also opens up these legal structures for liberal professions.

A key innovation is the standardized legal capacity of the GbR. Under the new law, a GbR can acquire rights and incur liabilities if it is intended to participate in legal transactions through the partners' joint will. This definition applies across different areas of law. The concept of joint assets has been replaced by the partnership's own assets, comprising partner contributions and rights acquired by or for the partnership.

While entry into a newly established company register is not mandatory, it offers benefits such as good faith protection. However, registration becomes compulsory if the GbR intends to dispose of or acquire rights recorded in public registers, such as real estate or patents. Registered GbRs are also subject to notification obligations regarding beneficial owners to the transparency register.

The law also clarifies partner liability. Shareholders are directly and jointly and severally liable to creditors for the partnership's liabilities, with contrary agreements being invalid against third parties. New provisions address emergency management to ensure the company remains operational even if not all partners can act jointly.

Legislators have addressed the tax implications of MoPeG with the Secondary Credit Market Promotion Act enacted in late December 2023. These reforms are set to significantly impact the operational landscape for businesses and professionals in Germany.