Last Updated on June 27, 2021 by LawEuro
German Civil Code (BGB) German law
Title 2
Legal persons
Subtitle 1
Associations
Chapter 1
General provisions
Section 21
Non-commercial association
An association whose object is not commercial business operations acquires legal personality by entry in the register of associations of the competent local court [Amtsgericht].
Section 22
Commercial association
An association whose object is commercial business operations acquires legal personality, for lack of special provisions under federal law, by state grant. The grant is in the power of the Land in whose territory the association has its seat.
Section 23 (repealed)
Section 24
Seat
The seat of an association, unless otherwise provided, is the place where the management is conducted.
Section 25
Constitution
The constitution of an association with legal personality is, to the extent that it is not based on the following provisions, determined by the articles of association.
Section 26
Board and representation
(1) An association must have a board. The board represents the association in court and out of court; it has the status of a legal representative. The extent of the power of agency may be restricted by the articles of association with effect against third parties.
(2) If the board consists of several persons, the association is represented by the majority of the board members. If a declaration of intent is to be submitted to an association, it is sufficient to submit it to one member of the board.
Section 27
Appointment of and management by the board
(1) The appointment of the board is by resolution of the general meeting.
(2) The appointment is revocable at any time, notwithstanding the claim to payment in conformity with contract. The revocability may be restricted by the articles of association to the case where there is a compelling reason for the revocation; such a reason includes without limitation a gross breach of duty or inability to effect proper management.
(3) The management by the board is governed by the provisions on mandate in sections 664 to 670 with the necessary modifications.
Section 28
Passing of resolutions by the board
In case of a board consisting of more than one person, resolutions are passed under the provisions of sections 32 and 34, which govern the resolutions of the members of the association.
Section 29
Emergency appointment by local court [Amtsgericht]
To the extent that the board is lacking the necessary members, they are to be appointed, in urgent cases, for the period until the defect is corrected, on the application of a person concerned, by the local court [Amtsgericht] that keeps the register of associations for the district in which the association has its seat.
Section 30
Special representatives
It may be provided by the articles of association that, in addition to the board, special representatives are to be appointed for particular transactions. In case of doubt, the power of agency of such a representative extends to all legal transactions that the sphere of business allocated to him normally entails.
Section 31
Liability of an association for organs
The association is liable for the damage to a third party that the board, a member of the board or another constitutionally appointed representative causes through an act committed by it or him in carrying out the business with which it or he is entrusted, where the act gives rise to a liability in damages.
Section 31a
Liability of members of executive bodies and special representatives
(1) If members of executive bodies or special representatives act free of charge, or if they receive remuneration for their activity which does not exceed 720 euros per year, they are liable towards the association for damage caused in performing their duties only in case of intent or gross negligence. Sentence 1 also applies to liability towards the members of the association. If there is a dispute as to whether a member of an executive body or a special representative has caused damage with intent or gross negligence, the burden of proof is incumbent on the association or on the member of the association.
(2) If members of executive bodies or special representatives are obliged under subsection (1) sentence 1 to provide to another party compensation for damage which they caused in performing their duties, they may demand from the association to be released from the obligation. Sentence 1 does not apply if the damage was caused with intent or gross negligence.
Section 31b
Liability of members of the association
(1) If members of the association act for the association free of charge, or if they receive remuneration for their activity which does not exceed 720 euros per year, they are liable to provide to the association compensation for damage caused in performing the duties of the association, in accordance with the articles of association, that have been assigned to them, only in case of intent or gross negligence. Section 31a (1) sentence 3 applies with the necessary modifications.
(2) If members of the association are obliged under subsection (1) sentence 1 to provide to another party compensation for damage which they caused in performing the duties of the association, in accordance with the articles of association, that have been assigned to them, they may require the association to release them from the obligation. Sentence 1 does not apply if the members of the association have caused the damage with intent or gross negligence.
Section 32
General meeting; passing of resolutions
(1) The affairs of the association, to the extent that they are not to be attended to by the board or another organ of the association, are dealt with by resolution in a meeting of the members. In order for the resolution to be valid, it is necessary for the subject to be stated when the meeting is convened. The resolution is decided by the majority of the votes cast.
(2) Even without a meeting of the members, a resolution is valid if all members declare their approval of the resolution in writing.
Section 33
Amendment of articles of association
(1) A resolution containing an amendment of the articles of association must have a majority of three quarters of the votes cast. In order to alter the objects of the association, the approval of all members is necessary; the approval of the members not present must be declared in writing.
(2) If the legal personality of the association results from a grant, the consent of the competent authority is necessary for every amendment of the articles of association.
Section 34
Exclusion from voting
A member has no right to vote if the resolution concerns entering into a legal transaction with him or commencing or disposing of litigation between him and the association.
Section 35
Special rights
Special rights of a member may not be adversely affected by a resolution of the general meeting without his approval.
Section 36
Convening of the general meeting
(1) The general meeting is to be convened in the cases laid down in the articles of association and when the interests of the association require it.
Section 37
Convening a meeting at the request of a minority
(1) The general meeting is to be convened if the proportion of the membership laid down in the articles of association or, in the absence of a provision, one-tenth of the members call in writing for a meeting to be convened, stating the purpose and the reasons.
(2) If the request is not granted, the local court [Amtsgericht] may authorise the members who made the request to convene the meeting; it may make orders on the conduct of the chairmanship at the meeting. The court with jurisdiction is the local court [Amtsgericht] that keeps the register of associations for the district in which the association has its seat. The authorisation must be referred to in the notice convening the meeting.
Section 38
Membership
Membership is not transferable and not inheritable. The exercise of membership rights cannot be entrusted to another person.
Section 39
Leaving the association
(1) The members have the right to leave the association.
(2) The articles of association may specify that leaving is admissible only at the end of a business year or only after a notice period; the maximum notice period is two years.
Section 40
Flexible provisions
The provisions of section 26 (2) sentence 1, section 27 (1) and (3), sections 28 and 31a (1) sentence 2, as well as sections 32, 33 and 38, do not apply where otherwise provided by the articles of association. It is not possible to derogate from section 34 through the articles of association, even for the passing of resolutions by the board.
Section 41
Dissolution of the association
An association may be dissolved by resolution of the general meeting. The resolution must have a majority of three-quarters of the votes cast, unless otherwise provided in the articles of association.
Section 42
Insolvency
(1) An association is dissolved by the commencement of insolvency proceedings and on the order becoming legally final by means of which the commencement of the insolvency proceedings has been rejected for insufficiency of assets. If the proceedings are discontinued on the application of the debtor or terminated after the confirmation of an insolvency plan that provides for the association to continue in existence, the general meeting may pass a resolution that the association is to continue in existence. The articles of association may provide that, if insolvency proceedings are commenced, the association is to continue as an association without legal personality; in this case too, if the requirements of sentence two above are satisfied, a resolution may be passed to continue the association as an association with legal personality.
(2) If an association is insolvent or is overindebted, the board must petition for the commencement of insolvency proceedings. If there is delay in petitioning, the members of the board who are at fault are responsible to the creditors for the damage resulting from this; they are liable as joint and several debtors.
Section 43
Deprivation of legal personality
An association whose legal personality is the result of a grant can be deprived of its legal personality if it pursues objects different from those in the articles of association.
Section 44
Jurisdiction and proceedings
Jurisdiction and the procedure for the deprivation of legal personality under section 43 are decided under the law of the Land in which the association has its seat.
*) Under Article 129 of the Basic Law [Grundgesetz], the Federal Minister of the Interior [Bundesminister des Innern] is now competent.
Section 45
Devolution of the assets of the association
(1) On the dissolution of the association or its deprivation of legal personality, the assets devolve on the persons specified in the articles of association.
(2) The articles of association may provide that the persons entitled to receive the assets are specified by a resolution of the general meeting or by another organ of the association. If the objects of the association are not commercial business operations, the general meeting may, even without such a provision, allocate the assets to a public foundation or institution.
(3) If no persons entitled are specified, then if according to its articles the association exclusively served the interests of its members, the assets pass in equal shares to the members at the date of the dissolution or the deprivation of legal personality, and failing this to the treasury of the Land in whose territory the association had its seat.
Section 46
Devolution on the treasury
If the assets of the association devolve on the treasury, the provisions on an inheritance that devolves on the treasury as the heir on intestacy apply with the necessary modifications. The treasury shall if possible use the assets in a manner corresponding to the objects of the association.
Section 47
Liquidation
If the assets of the association do not devolve on the treasury, there must be a liquidation, unless insolvency proceedings have commenced with regard to the assets of the association.
Section 48
Liquidators
(1) The liquidation is effected by the board. Other persons may also be appointed as liquidators; the appointment is governed by the provisions for the appointment of the board.
(2) The liquidators have the legal status of the board, unless the purpose of the liquidation leads to a different conclusion.
(3) If there are several liquidators, they are only empowered to represent jointly, and can only enact orders unanimously, unless provided otherwise.
Section 49
Duties of the liquidators
(1) The liquidators must complete the current business, collect the receivables, convert the rest of the assets into cash, satisfy the creditors and pay out the surplus to those entitled to receive it. In order to complete transactions that are in progress, the liquidators may also enter into new transactions. The collection of receivables and the conversion of the rest of the assets into cash may be omitted to the extent that these measures are not necessary to satisfy the creditors or to distribute the surplus among those entitled to receive it.
(2) The association is deemed to continue in existence until the end of the liquidation if the purpose of the liquidation requires this.
Section 50
Public notice of the association in liquidation
(1) The dissolution of the association or its deprivation of legal personality must be announced by the liquidators in a public notice. In the notice, the creditors must be requested to register their claims. The public notice is made through the newspaper specified in the articles of association for this purpose. Public notice is deemed to have been made at the end of the second day after the publication or first publication.
(2) Known creditors must be requested by special invitation to register their claims.
Section 50a
Newspaper for notices
If an association has not specified a newspaper in the articles of association, or if the newspaper specified for notices has ceased publication, notices of the association must be published in the newspaper that is specified for public notices of the local court [Amtsgericht] in whose district the association has its seat.
Section 51
One-year waiting period
The property may not be paid out to the persons entitled to receive it until a year has passed after the announcement by public notice of the dissolution of the association or the deprivation of legal personality.
Section 52
Security for creditors
(1) If a known creditor does not register his claim, the amount owed, if the right to deposit exists, must be deposited for the creditor.
(2) If the discharge of an obligation is not possible at the time, or if an obligation is disputed, the property may be distributed to the persons entitled to receive it only if security is provided to the creditor.
Section 53
Liability in damages of the liquidators
Liquidators who commit breaches of their duties under section 42 (2) and sections 50, 51 and 52 or who, before the satisfaction of the creditors, distribute assets to the persons entitled to receive are, if they are at fault, responsible to the creditors for the damage resulting from this; they are liable as joint and several debtors.
Section 54
Associations without legal personality
Associations without legal personality are governed by the provisions on partnership. When a transaction is entered into with a third party in the name of such an association, the person acting is personally liable; if more than one person acts, they are liable as joint and several debtors.
Leave a Reply