OHG: General Partnership

The oHG is a form of company whose purpose is the operation of a commercial business under a joint company name and in which all partners have unlimited liability to creditors. It is particularly suitable for small and medium-sized companies.

According to the German Commercial Code (Handelsgesetzbuch, HGB), commercial enterprises are defined as companies that carry out typical commercial activities (formerly: basic trade): e.g. wholesale and retail trade, manufacturing industry, banking and insurance industry, transport industry, commercial agents, etc. However, persons who operate a craft or other commercial enterprise are also considered to be merchants.

The law of the oHG is regulated in §§ 105-160 of the German Commercial Code (HGB). In addition, the regulations on the basic form of every company, the Gesellschaft bürgerlichen Rechts (GbR) (civil law partnership) (§§ 705-740 BGB) apply. From the point of view of the corporate form, the OHG can also be seen as a special form of the GbR for a trade with a commercial scope of business.

The oHG is a commercial partnership. In contrast to a corporation, it is not the contribution of capital that is the main focus, but the personal commitment of the partners. As a rule, the partners use their own labour, which results in a certain personal attachment to the company. The formation of a partnership is not dependent on a certain minimum capital.

What is the constitution, organs of the OHG?

The oHG does not have its own legal personality, which is different from that of the partners themselves. Nevertheless, it is similar to a legal entity in that it can sue and be sued in court. It can acquire rights and enter into obligations, acquire ownership and other real rights in real property. Each partner has sole power of management and sole power of representation. Deviating agreements may also be made.

How does the foundation of an oHG take place?

The oHG is formed by articles of association of at least two shareholders. Shareholders of an oHG can be domestic and foreign natural and legal persons (e.g. in the case of the GmbH & Co. oHG). In addition, other commercial partnerships can also participate as shareholders. A change of shareholders is only possible with the consent of all shareholders, unless otherwise stipulated in the contract.

The amount of the capital can be freely agreed. A minimum capital is not required.

The oHG is a commercial company, i.e. according to the definition of the German Commercial Code (HGB), its business purpose is to operate a commercial business. Apart from a typical, traditional trade (wholesale, retail), an oHG can also pursue all other purposes permitted in the form of a trade (in particular industry, trade and other services), just like any trader entered in the commercial register.

If the business operations of a company require a business operation that is commercially oriented in terms of its type and scope, the company is always considered a commercial enterprise, regardless of whether or not it has been entered in the commercial register. When assessing whether a company is managed in a commercial manner, the annual turnover, type and number of business transactions, borrowing, business premises, number of employees, type of bookkeeping, etc. must be taken into account in particular.

Enterprises which, in terms of type and scope, operate a business operation which does not have to be set up in a commercial manner can be registered voluntarily in the commercial register and are thus considered to be a merchant with all rights and obligations. A GbR thus becomes an oHG by registration.

The company name is the name of an enterprise with which it acts in legal and business transactions. The company name of the oHG can contain the surname of a partner, fancy additions or additions in kind, as long as it is distinctive and thus has a name function. It can also be formed as a combination of these elements. The legal form “general partnership” must always be indicated. It can also be abbreviated with “oHG”.

To avoid trademark infringements, appropriate professional company and trademark similarity searches must be carried out before the company name is determined.

Only the company registered in the commercial register can have a company name which can be sold, inherited and leased together with the business operation.

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