Non-Governmental Organisations (NGO) in Germany

Our lawyers for non-governmental organisations advise clients on establishing a new NGO and expanding an existing NGO into Germany. The main legal forms that an organisation can take include the following: Verein, Stiftung, gemeinnützige Unternehmergesellschaft (gUG) and gemeinnützige GmbH (gGmbH). Different requirements are placed on the establishment of each of these forms of organisation.

For example, the non-profit entrepreneurial company has much lower requirements for share capital than the non-profit GmbH. However, the two forms of organisation also have different reputational values. Since it is possible to convert the gUG into a gGmbH over time, the gUG may be the more suitable form when it is founded. Another example is that, compared to the foundation, the association is not subject to the same official supervision, and there are far lower requirements for share capital.

The registration of a non-profit entrepreneurial company (gUG) and a non-profit limited liability company (gGmbH) is similar to the formation of a for-profit limited liability company. However, the non-profit objectives of the company must be clearly stated in the articles of association of the gGmbH, which are reviewed by the authorities in Germany. To set up the non-profit company, you must state the objectives pursued by it and how these are to be achieved. Once established, the NGO will have a management structure similar to that of a GmbH with a managing director. One advantage of these two legal forms is the limited liability.

Our NGO lawyers advise and support you in all legal matters concerning the establishment of your NGO. Which legal form is best suited for your NGO depends on many individual factors, such as the start-up capital available. The purpose of the NGO, the competition in this field and much more are also decisive. Especially for NGOs that want to expand to Germany, comprehensive legal support from German partners on-site is highly recommended.

As a full-service law firm, we provide ongoing support to non-governmental organisations in all areas of German law. Our lawyers bring their sector-specific expertise to bear on questions of management structures, best practice considerations and project development and financing for our partners.

Our team monitors the legal compliance requirements of our partner NGOs, enabling them to focus more on their goals and projects. Compliance is one of the essential requirements for an NGO in Germany. After all, non-compliance with legal requirements and disputes can damage the NGO’s reputation. But NGOs, in particular, rely on their reputation and damage in this area can lead to a loss of trust among donors, supporters, volunteers and other partners. Our German NGO lawyers assess the legal requirements the planned projects must fulfil to ensure an undisturbed and successful process.

In practice, this means that our lawyers for contract law carefully draft your contracts and thoroughly analyse existing contractual agreements. They review your organisation’s insurance coverage and ensure it is fully compliant. In addition, our law firm is happy to assess the level of transparency and communication structures of your NGO. Furthermore, our lawyers advise on the NGO’s tax obligations and the financial documents to be disclosed. Furthermore, our experts in the field of German labour law ensure that your NGO is informed about best practices in this area and that labour law regulations are at the forefront.

Successful NGOs in Germany can expand and increase their reach by merging with other charitable organisations. Such mergers have become more common over the years as NGOs with similar aims find that unity can increase their strength and improve their impact. The “hostile” takeover of another organisation does not generally happen between NGOs, and aggressive behaviour can cause reputational damage. However, the fusion of two similarly sized NGOs or merging with a more successful one may be the best means of achieving established goals, increasing the NGO’s reach and launching future projects. Our German NGO lawyers are here to advise and support with all matters concerning such mergers.

Our team is experienced in more traditional corporate M&A transactions, and similar requirements apply in NGO mergers. Both parties need to carry out extensive due diligence in preparation for the merger. Such due diligence will ensure no surprises once the merger is carried out and can allow one party to back out of the arrangement should they discover something that may damage them. Our lawyers will prepare the necessary documents and oversee the legal requirements to ensure that the merger can continue.

However, although there are some similarities with corporate M&A transactions, the merger of NGOs also depends on the groups’ types of organisational structures. There are different requirements for charitable limited companies such as gGmbhs and gUGs compared to those for associations and foundations. Similarly, the aftermath of the fusion or merger should not encourage hostility. A “franchising” arrangement where the smaller entity still possesses levels of independence may be more suitable to achieving the overall objectives. Other essential factors concern the specific field of the NGO and the tax law requirements concerning the respective bodies.

Once the fusion has taken place, our team will advise on all matters regarding how the organisation’s management structure, the framework of the group, and how it can be restructured to ensure that the success continues. Working alongside our German NGO lawyers means that you can confidently proceed, knowing that our team will support you throughout.

Non-profit organisations need to maintain their good reputation. Allegations of corruption, illegal activities or poor working conditions can cause the loss of the support of those interested in your cause. It is crucial to implement effective whistleblowing systems to ensure the continued success of your NGO and comply with the legal regulations that have come into force. Without such systems, employees who want to expose wrongdoing in your organisation can quickly feel moved to go public. This can lead to significant reputational damage and loss of revenue.

Since the Whistleblower Protection Act came into force on 2 July 2023, it has been incumbent on all legal entities with a workforce of 50 or more employees to set up internal whistleblowing units (according to § 12 HinSchG). This obligation applies regardless of the legal form. Consequently, it also applies to non-governmental organisations (NGOs). Those not complying with this obligation will face considerable legal consequences (including heavy fines) as of December 2023.

To provide NGOs with the necessary support in implementing this legal requirement, the law firm Schlun & Elseven offers a competent and committed service. Our lawyers explain which preventive measures you can take to prevent whistleblowing while effectively complying with all legal obligations. By implementing an efficient whistleblowing system certified according to the applicable ISO standard, we ensure that whistleblowers are protected in accordance with the regulations while, at the same time, your organisation benefits from the information provided. We work on your behalf to protect your rights and interests as a non-governmental organisation.