Support in the Establishment of the NGO
Whether the organisation is new or if it is expanding to Germany, our lawyers will advise you on how to get established. Some of the main forms an organisation can take include the following; associations (Verein), foundations (Stiftung), charitable entrepreneurial companies (gUG) and charitable limited liability companies (gGmbH). Each of these organisation types has different requirements in the establishment. Whereas the charitable entrepreneurial company has lower capital stock requirements than the charitable limited liability company, there is a difference in the reputational value between these forms of organisation. However, the gUG can be transformed into a gGmbH over time, and therefore the gUG may be the more suitable form upon establishment. Another example is that associations have lower official supervision and far lower capital stock requirements when compared to a foundation.
Registering charitable entrepreneurial companies (gUG) and charitable limited liability companies (gGmbH) is similar to the founding of German profit-driven limited companies. However, the company’s charitable goals need to be clearly demonstrated in the articles of association of the charitable group, and the authorities will assess this in Germany. In establishing the charitable company, they must state their objectives and how they will be achieved. Once the NGO is established, it will have a similar management structure to a limited liability company with a recognised managing director. Those involved with the group will benefit from limited liability.
Our German NGO lawyers will assist you on these matters and more in the establishment of the NGO. The form your NGO will take will depend on many individual factors, from the amount that can be invested in the NGO at the beginnings, the competition in the area, the purpose of the NGO and much more. For NGOs looking to expand to Germany, comprehensive support from on-the-ground German partners is strongly advisable.
On-Going Support from German NGO Lawyers
As a full-service law firm, Schlun & Elseven Rechtsanwälte assists our NGO clients across all areas of German law on an on-going basis. Our lawyers apply their industry-specific expertise on issues concerning our partners’ management structures, best-practice considerations and with their project development and funding.
Our team oversee the legal compliance requirements of our partner NGOS and that allows them to focus more on their goals, objectives and important projects. Legal compliance is a key requirement an NGO in Germany as non-compliance or legal controversies can damage the reputation of the NGO. Of all sectors, NGOs are reliant on their strong reputation and damage in this area can lead to a lack of confidence from donors, supporters, volunteers and other partners. Once our German NGO lawyers are made aware of the planned projects, they can assess the legal requirements that need to be fulfilled to ensure that they can continue.
In practice this means that our contract lawyers will carefully draft your contracts and thoroughly analyse existing contractual agreements. They will assess the insurance coverage your organisation has and ensure that they are fully compliant on this matter. Our firm will assess your NGO regarding its level of transparency and its communication structures. Additionally, our lawyers can be relied upon for advice on the NGO’s responsibilities regarding German tax law and the financial documents the organisation needs to publish. Furthermore, our certified experts in the field of German employment law, will ensure that your NGO is fully aware of best practice in the field and that employment law regulations are at the forefront.
Fusions and Mergers of NGOs in Germany
Successful NGOs in Germany can expand and increase their reach by merging with another charitable organisation. 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 important 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.