The Publicity of the Commercial Register: Legal Certainty in Business Dealings

The commercial register (Handelsregister) is of central importance for the participation of companies in legal and business dealings. It creates transparency and trust by providing public information on essential legal circumstances of merchants and companies – for example on the registered office, the object of the company and the persons authorised to represent it.

In principle, one may rely on the entries in the commercial register. Registered facts are deemed to be correct and complete (positive publicity); a contracting party generally cannot be confronted with unregistered facts (negative publicity). However, this applies only if one has no positive knowledge that the commercial register is incorrect in this respect.

At the same time, general legal principles must be observed, in particular the abuse of the power of representation (Missbrauch der Vertretungsmacht). This refers to situations in which restrictions arising from the internal relationship under company law exceptionally also take effect in the external relationship. This is the case, for example, where a managing director deliberately harms the company by exceeding his or her management powers and the contracting party knows this or this knowledge must have forced itself upon the contracting party. In such cases, the power of representation shown in the commercial register may exceptionally cease to apply, and the contract is at risk of being invalid.