- Requirements for Effective Representation of Civil Law Companies
- May 24, 2013
- Law Firm: GRP Rainer LLP
- For proof of signature authority of a member of a civil law company (GbR), a company stamp is sufficient.
GRP Rainer Attorneys and Tax Accountants in Cologne, Berlin, Bonn, Düsseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Bremen, Nuremberg and London www.grprainer.com/en explain: In its judgment from 23 January 2013 (Ref.: XII ZR 35/11), the German Federal Supreme Court (BGH) continued its judicature on the disclosure of representation upon conclusion of long-term tenancy leases. If a member of a civil law company (GbR) wants to represent the company at the conclusion of a long-term lease agreement, then the member with signature authority should include a company stamp when signing on behalf of the company. It is not necessary to comply with the formal requirement in writing that stipulates that upon conclusion of a long-term lease that all members of the civil company are signatories to the lease. Rather, it is sufficient if the representing member’s signature is accompanied by an addition (the company stamp) which indicates the representative status of the signatory and thus brings expression to the sole entitlement of the representing member to represent the company.
The German Supreme Court had to decide a case in which a civil law company had signed a lease with a term of ten years. The contractual document was only signed by one member and the signature was accompanied by a stamp of the company.
The authorization for the member to represent the company has been established as already being apparent in the issued opinion of the German Supreme Court due to the stamp imprint because legitimizing effects of legal transactions could be attributed to the company stamp.
For civil law companies, there are few mandatory legal guidelines and it is up to their members to define the company by its articles of association. Depending on the founding contract or charter type of a company, even the representation of a company by a single member may pose problematic challenges such as complying with various formal requirements. In order to avoid uncertainty and to ensure effective representation by individual members as well as compliance with any formal procedural requirements, it is advisable to seek legal advice and consultation early on from a lawyer.