An "eG" or eingetragene Genossenschaft is a "registered cooperative society" under German Law. Unregistered cooperatives are also possible in Germany but practically never used in practice. In 2004 there were 5470 registered cooperative societies.
"eG"'s are relatively rare commercial entities in Germany.
In some ways they're similar to
registered associations (i.e. "eV" or
eingetragener Verein
An (; "registered association" or "incorporated association"), abbreviated (), is a legal status for a registered voluntary association in Germany. While any group may be called a , registration as confers many legal benefits, because it con ...
) except for the fact that an "eG" may carry out "commercial operations" whereas a "registered association" (i.e. club) is specifically restricted under German la
Section §21 of the German Civil Code or "Bürgerliches Gesetzbuch(BGB)"to being a "non-economic association" i.e. it may not carry out any commercial business operations.
They are a special form of commercial association established to reduce
barriers of entry for specific activities that lie in the public interest. The "eG" seems like a mixture of
capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used f ...
(especially
Company
A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...
) and an association.
These organizations have limited liability for their members with regard to debt repayment. The private assets of "eG" members can never be called on by the "eG" or its creditors to pay for a debts that the "eG" may incur. Under the "eG" rules it is also possible that certain
funding commitments of its members also repaid in the case of a
bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
. Participants in an "eG" must be legal "members" of their "eG". In addition, "eG"'s are subject to compulsory audits under law. Mandatory membership and audit costs can be considerable financial burdens for new and small cooperatives.
The organization must promote the interests or business of its members, or their social or cultural interest through their joint operation unde
Section §1 of the German Cooperative Society Act or "Genossenschaft Gesetz(GenG)" It is a legal person unde
and
Under German commercial law an eG is recognized as a form of merchant
[ ttp://dejure.org/gesetze/HGB/2.html Section §2 of the German Commercial Law Act or "Handelsgesetzbuch (HGB)" - Dejure.org/ref>
]
References
External links
German Civil Code or "Bürgerliches Gesetzbuch(BGB)
German Cooperative Society Act or "Genossenschaft Gesetz(GenG)
German Commercial Law Act or "Handelsgesetzbuch(HGB)