Commercial law

Question 1

What are the different forms of merchants (Kaufleute)?

Answer 1

There are three main forms of merchants under German commercial law:

Small Merchants (Kleingewerbetreibende)
Merchants by virtue of trade (Ist-Kaufleute)
Optional merchants (Kann-Kaufleute)

Question 2

What are Merchants by virtue of trade (Ist-Kaufleute)?

Answer 2

• Individuals or businesses that engage in commercial or business activities on a regular basis.
• Three requirements (Regular engagement in commercial activity, independence and commercial purpose)
• The commercial code applies for merchants by virtue of trade.

Question 3

What are small Merchants (Kleingewerbetreibende)?

Answer 3

Individuals who meet the requirements for merchants (regular engagement in commercial activity, independence and commercial purpose) on a small scale.

• exempted from certain requirements of the HGB such as double bookkeeping or annual financial records

Max turnover: 22k /year

Question 4

What are optional merchants (Kann-Kaufleute)?

Answer 4

Optional merchants are individuals or businesses that have the option whether to be subject of the regulation of the HGB or be treated as private individuals.

• Option is exercised by making a declaration to the commercial registry
• Benefit from the protection and privileges of merchants and opt-out at any time

Question 5

What is the commercial registry? What needs to be registered?

Answer 5

Commercial registry - public register in containing information about all businesses (GmbH, partnerships, AG) in Germany to ensure transparency in commercial transactions.

• maintained by the local chamber of commerce

Information that must be registered:
Company name, granting of procuration, managing director

Information that can be entered:
Limited liability

Question 6

What are negative and positive publicity of the commercial register?

Answer 6

Positive publicity (§15 para 3):
- means that certain information about businesses is publicly accessible to provide transparency in commercial transactions

Negative publicity (§15 para 1):
- refers to information not publicly accessible such as financial status or business dealings, kept confident by the companies

• Principle of publicity is an important aspect of the German commercial registry