The GbR in Germany — the Simplest Way to Start a Partnership

Two people, one business idea, a handshake — legally, that's all it takes to create a GbR. The Gesellschaft bürgerlichen Rechts (civil law partnership) is Germany's simplest company form: no minimum capital, no notary, no commercial register. The price is unlimited personal liability for all partners. When that's acceptable and when it isn't — this guide sorts it out.

What is a GbR?

A GbR comes into existence when at least two persons (natural or legal) join forces to pursue a common purpose — governed by sections 705–740 of the German Civil Code (BGB). The purpose doesn't even have to be commercial: shared offices or joint projects also run as GbRs.

The core characteristics:

• Informal formation: a verbal agreement is legally sufficient (written form still strongly advised)
• No commercial register: registration only with the tax office; for commercial activity also the trade office
• Joint and several liability: every partner is liable for all debts of the GbR — with their private assets, regardless of who caused them
• Transparent taxation: profits are attributed directly to the partners and taxed as personal income (0–45% progressive)

Forming a GbR in 6 steps

1. Choose your partners — at least two
2. Write a partnership agreement: purpose, contributions, profit split, decision rules, exit clauses. Not mandatory, but this contract prevents the most expensive disputes later
3. Tax office: tax registration questionnaire (via ELSTER) — you receive a tax number; details in our tax number guide
4. Trade office (only for commercial activity; freelancer GbRs can skip this)
5. Open a business bank account — not legally required, practically indispensable
6. Check insurance: with unlimited personal liability, business liability insurance is not optional decoration

A GbR also needs a legal imprint with a serviceable address. If you don't want to publish your home address, use a business address from Clevver.

The liability risk, concretely

Example: your co-partner orders €50,000 worth of goods, and the GbR can't pay. The supplier can sue you for the full amount — private assets included. Compensation claims against your partner only help afterwards, and only if there's anything to collect.

Hence the rule of thumb: the GbR fits manageable risks — consulting, creative projects, small services. With inventory, loans, or employees, the liability quickly becomes existential.

GbR vs. UG vs. GmbH

| | GbR | UG | GmbH | |---|---|---|---| | Formation cost | ~€0–30 | ~€500–800 | ~€800–1,500 | | Minimum capital | none | €1 | €25,000 | | Liability | unlimited, joint and several | limited | limited | | Accounting | cash-basis possible | balance sheet required | balance sheet required | | Conversion possible? | → UG/GmbH anytime | → GmbH | — |

Switching from a GbR to a UG or GmbH is possible at any time — many teams start as a GbR and convert once revenue and risk grow.

FAQ

Does a GbR need a written agreement? Legally no. Practically: absolutely. Without one, the BGB default rules apply — e.g. profit split per head instead of per contribution.

How is a GbR taxed? Partners tax their profit share as personal income. Commercial GbRs pay trade tax above €24,500 annual profit; VAT applies like for any business — see our VAT guide.

Can a GbR own property? Yes. Since the 2024 GbR reform, a registered GbR (eGbR) can even hold real estate in its own name in the land register.

What happens when a partner leaves? Ideally the agreement covers it (compensation, continuation). Without a clause, an exit can dissolve the partnership.