A New Legal Form on the Horizon: The Company with Tied Assets (Gesellschaft mit gebundenem Vermögen, GmgV)

The Federal Ministry of Justice and Consumer Protection and the Federal Ministry of Finance propose the introduction of a new legal form for companies: the company with tied assets (Gesellschaft mit gebundenem Vermögen, GmgV).

In the GmgV, the assets are to remain in the company. In concrete terms, this means that it should not be possible simply to distribute profits. Instead, profits are to be reinvested. In cases of business succession in particular, this is intended to ensure that the company is not broken up or sold on account of short-term profit interests. Hidden profit distributions are also to be ruled out, for example by way of bonuses for business success or loans to the company.

The legal form of the GmgV and the asset lock are not to be capable of being altered by the articles of association. The GmgV is to be subject to audit by the existing cooperative audit structures.