Natural and Legal Persons
in the German Civil Code
The Bürgerliches Gesetzbuch (or BGB) is the civil code of Germany. In development since 1881, it became effective on 1
stJanuary 1900.
Consequently, the BGB contains five books:
the General Part ("Allgemeiner Teil"), sections 1 through 240
the Law of Obligations ("Recht der Schuldverhältnisse"), sections 241 through 853
the Property Law ("Sachenrecht"), sections 854 through 1296
the Family Law ("Familienrecht"), sections 1297 through 1921
the Succession Law ("Erbrecht")
Difference between:
Rechtsfähigkeit = legal capacity
Handlungsfähigkeit = capacity to act
Geschäftsfähigkeit = capacity to contract
Deliktsfähigkeit = legal capacity to commit tortious acts
Natural Persons
Begin of Legal Capacity
Legal Capacity = the capacity of being the subject of your own rights and obligations
A child still living in the womb (Nasciturus) has no legal capacity; to obtain legal capacity, the completion of birth is necessary
However, the Nasciturus is not left without any rights at
all; for example, it can possess claims for prenatal injuries
only if born alive
The legal capacity of a natural person ends with their death.
What death means is not legally defined, but it is to be established through medical science (brain death criterion).
Proof of death is done with the help of the Death Register.
If a person disappears, a declaration of
death should be made in accordance with the Law of Missing Persons
(Verschollenheitsgesetz)
End of Legal Capacity
= ability to effectively enter legal transactions
Full capacity to contract = when the person has reached the age of 18 contract is valid
Limited capacity to contract = a minor who has reached the age of 7 but is under 18 contract is valid in case of consent or ratification of the legal representative or if the contract represents only a legal benefit for the child or if the minor effects the payment with own means that were given to him for this purpose or for free disposal by the legal representative or by a third party with the ratification of the representative
Capacity to Contract [1]
Partial capacity to contract:
If the legal representative, with the ratification of the family court, authorises the minor to operate a trade or business independently, the minor has unlimited capacity to contract for such transactions
If the legal representative authorises the minor to enter service or employment, the minor has unlimited capacity to enter into transactions that relate to entering or leaving service or employment of the permitted nature or performing the duties arising from such a relationship
Incapacity to contract = if the child is not 7 years old yet or if the person is in a state of pathological mental disturbance, which prevents the free exercise of will, unless the state by its nature is a temporary one
contract is invalid with one exception: If a person of full age incapable of contracting enters into an everyday transaction that can be effected with funds of low value, the contract he enters into is regarded as effective
Capacity to Contract [2]
= ability to commit a tort which results into a damage for which compensation is mandatory
No capacity = a person who has not reached the age of 7 is not responsible for damage caused to another person.
Limited capacity = a person who has not yet reached the age of 18 is responsible for damage he inflicts on another person if, when committing the damaging act, he does have the insight required to recognise his responsibility.
Exception:A person who has reached the age of 7 but not the age of 10 is responsible for damage that he inflicts on another party in an accident involving a motor vehicle, a railway or a suspension railway if he intentionally caused the injury.
Full capacity = when the person has reached the age of 18.
Legal Capacity for Tortious Acts
= associations or assets recognized by the law as legal entities having distinct legal personality
Types of legal persons (in Civil Law):
Associations (Vereine)
Foundations (Stiftungen)
Other private companies
Legal Persons
= permanently established affiliation of persons having a common purpose and a corporate constitution
Types:
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] e.g. Employers' Organization, Ambulatory Health Association, Home and Landowners Association
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.
Debt Collector Association, Real Estate Market, Shopping center for officials / union members, Private medical settlement offices
Legal Persons - Associations
= totality of assets endowed with legal personality for the realization of the purposes of the founder
Foundations are composed only of assets, they have no members;
even those who benefit from the foundation are neither members nor organs of the foundation.
The purpose of the foundation occurs from the declaration of will of the founder.
The creation of a foundation with legal personality requires an endowment transaction and recognition of the foundation by the competent public authority of the Land in which the foundation is to have its seat.
The foundation has a distinct legal personality.
Legal Persons -
Foundations
The joint-stock corporation (AG): Only the corporate assets are liable to the creditors for its liabilities. It has an authoried capital split up into shares.
Partnership limited by shares (KGaA): Joint-stock corporation that has on the board personally liable partners.
Company with limited liability (GmbH):The German limited liability company is a commercial company with a separate legal personality which can be established for any legally permissible purpose. The shareholders participate in the company through ownership of one or more shares in the company's share capital. As a result of its separate legal personality, when the company enters into transactions with third parties, its shareholders are not personally liable towards those third parties.
Registered cooperative (eG): an autonomous association of people united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled business.
