The delayed formation of GmbH or UG
Many founders postpone the foundation of a GmbH or a UG because they do not feel ready yet, lack the means or do not have the team in order. However, they are not aware that they may have already formed a company and are thus in the middle of the foundation process and company management!
Automatic GbR formation without a contract
If you share working with others for a common goal, e.g. developing a software or writing a business plan, you automatically found a civil law partnership (Gesellschaft bürgerlichen Rechts, GbR). This does not require a partnership contract or any other formation act. Such a “silent” formation happens by law without the partners even being aware of it.
What is a civil law partnership?
In contrast to the limited liability companies GmbH and UG a GbR is not a legal entity, but a partnership, i.e. it is a collaboration of at least two people towards a common goal. The goal does not need to be commercial in nature, but can be.
If you work on software or a business plan on your own, you may have formed a solo-entrepreneurship, which causes far fewer problems.
Disadvantages of the GbR
Unlimited liability with your private estate
In a GbR and a solo-entrepreneurship all acting people and partners are personally liable without limits, but with their whole private estate, regardless which partner has created the liability - for in the GbR each partner is in general entitled to manage the company and create liabilities. This unlimited liability is one of the main reasons for wanting to form a limited liability company such as a GmbH or UG in the first place.
Unanimous resolutions
All partnership resolutions have to be made unanimous, unless otherwise stipulated in the partnership agreement, which will mostly not exist due to the “accidental” formation. Therefore, if a partner obstructs the decisions, he can blockade any partnership processes. This is another advantage of a GmbH or UG, where majority of votes according to shares is the rule.
Kicking out only in extreme cases
Kicking out a troublemaker without contractual provisions can only occur in extreme cases. Other than a limited liability company, partnerships are contingent on the personal setup of its partners.
Difficulties in closing down the GbR
Oftentimes, the only solution to this impasse is dissolving the GbR. Besides delaying matters further, this has its own kind of problems: When dissolving the partnership, all partnership assets need to be distributed amongst the partners. This can naturally create arguments regarding the valuation and distribution. Furthermore, one does not know for sure that a partner will supply essential assets in a subsequent formation of a GmbH (assets in kind cannot be contributed in UGs).
How do you solve the GbR dilemma?
Plan A: Forming a GmbH or UG early on
Because of all of these problems this is my advice: Found a GmbH or a UG as early as possible, especially before creating IP such as software or trademark or before creating any revenue.
Plan B: partnership agreement using our template
What if you already formed a GbR or if you need to because of grant conditions, e.g. by Exist? The next best solution is to start a civil law partnership, but formally using a partnership agreement. In the agreement you settle the share split, contributions, obligations, representation, majorities as well as termination and compensation. In the download section you will find a template for a partnership agreement.
Measures during the partnership: capital invested, accounting
Running a GbR you should make sure to have more assets than liabilities, whereas the assets should not be composed of self created IP such as software because for an ensuing assignment of the GbR into a GmbH or UG you need positive assets. One way to achieve that is paying in capital invested for each partner. After all, any income and expenses should be properly booked, e.g. using an accounting software such as Lexware, ideally on a GbR owned bank account. This way you will not only have clear ownership of the GbR, but this also facilitates the job of your tax advisor when assigning the GbR to the limited liability company later. Finally, if the partnership is already present on the market, it needs to register commerce.
Transfer of GbR assets into GmbH or UG
How do you then get the assets to a GmbH or UG later on?
Do NOT ignore the GbR!
Unfortunately the most common big mistake is to ignore the fact that you created a GbR and simply form a limited liability company in cash. In that case taxes will accrue and you circumvene the requirements for forming a company in kind, which will trigger a fine. Since the GbR has not been terminated properly, it still owns the assets. Therefore, each GbR partner can stop the GmbH or UG from using the assets and ask it to return those assets. For these reasons the limited liability company can be blackmailed and any future warranties to investors regarding IP ownership are false and put those investments at (retroactive) risk.
Exception: Dissolve a GbR without assets and form a GmbH or UG instead
What should you do instead? If the GbR is a mere shell without assets of its own, you can simply dissolve it and form a GmbH or UG instead.
Normal case: Assign GbR with assets into limited liability company
Usually, the GbR will have assets that the future limited liability company will need, e.g. copyright texts or software. These assets will need to be transferred using assignment of the individual GbR shares into the newly formed GmbH or UG. The goal of such assignment is a tax neutral transfer of assets. Therefore, in both companies the share distributions need to match; otherwise taxes will apply, potentially even years later.
Conclusion
Due to the numerous risks of a GbR the best course would be to avoid a GbR in the first place and form the limited liability company right away, but if that is not practicable or too late, we help you with the partnership agreement and subsequent assignment of the GbR into the UG or GmbH. When forming such a limited liability company you need to adapt the regular foundation documents and add GbR resolutions and assignment contracts. To do so, you need a skilled tax advisor and a law firm such as Streiff Law that is experienced in these cases.
Published on 07.09.2025