Non-governmental organisations already established in Germany, as well as those wishing to establish themselves in Germany, can rely on the experienced and committed legal advice of Schlun & Elseven Rechtsanwälte. As a German multidisciplinary full-service law firm, we have legal experts and highly specialised practice groups across many areas of German law, enabling us to offer excellent legal services from a single source, even for complex and cross-border matters.
Whether you are setting up a branch in Germany, expanding through franchising or mergers, or running an ongoing business, our lawyers will support you with their in-depth expertise and many years of experience. With reliable legal advice in numerous areas of law – including German employment, copyright, and franchise law – our lawyers are always at your side. If your organisation needs a skilled legal partner to ensure the legality of your projects, deal with German bureaucracy without complications, or represent you in a specific case, please do not hesitate to contact us. We will do our utmost to ensure that your NGO is legally compliant at all times.
Founding an NGO: Comprehensive Legal Support
As an interdisciplinary law firm, we have the necessary expertise in German foundation, association, corporate, and tax law to support non-governmental organisations in all legally relevant matters. Our legal experts advise you on establishing a new NGO and expanding an existing NGO into Germany. The most important legal forms that an organisation can take include the following: Association (Verein), foundation (Stiftung), non-profit entrepreneurial company (gemeinnützige Unternehmensgesellschaft, gUG) and non-profit limited liability company (gemeinnützige GmbH, gGmbH). Different requirements apply to the establishment of each of these organisational forms. For example, the requirements for share capital are significantly lower for the non-profit entrepreneurial company than for the non-profit limited liability company. However, the two forms of organisation also have different reputational values. As 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 the association is not subject to the same official supervision as the foundation, and it has far lower share capital requirements.
The registration of a non-profit entrepreneurial company (gUG) and a non-profit limited liability company (gGmbH) is similar in many respects to forming a for-profit limited liability company. However, the non-profit objectives of the company must be set out in the gGmbH’s articles of association, which are reviewed by the German authorities. To set up the non-profit organisation, 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 in Germany. One advantage of these two legal forms is the limited liability.
Our German lawyers will advise and support you in all legal matters relating to the establishment of your NGO. The most suitable legal form for your NGO depends on many individual factors, such as the available start-up capital. The purpose of the NGO, the competition in this field, and much more are also decisive. Comprehensive legal support from local German partners is highly recommended, especially for NGOs that want to expand into Germany.
Compliance Management: On-Going Support from our NGO Lawyers
As a full-service law firm, we provide ongoing support to non-governmental organisations in all areas of German law. Our lawyers apply their sector-specific expertise to issues related to 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 an essential requirement for an NGO in Germany, as non-compliance with legal requirements and related disputes can damage its reputation. Damaging their good reputation can lead to a loss of trust among donors, supporters, volunteers, and other partners. Our experienced lawyers assess the legal requirements that the planned projects must fulfil to ensure an undisturbed and successful process.
Our lawyers specialising in German contract law will draft your contracts carefully and analyse existing contractual agreements in detail. They will review your organisation’s insurance coverage and ensure that it is fully compliant. Our law firm will assess your NGO’s level of transparency and communication structures. In addition, our lawyers advise on the NGO’s tax obligations and the financial documents to be disclosed in Germany. Furthermore, our German employment law experts will ensure that your NGO is aware of best practices in this area and that employment law regulations are at the forefront.
German Corporate Law | Fusions and Mergers of NGOs
Successful NGOs in Germany can expand and increase their reach by merging with other non-profit organisations. Such mergers have become more common over the years, as NGOs with similar goals can strengthen and improve their impact as a unit. As a rule, there is no “hostile” takeover of another organisation between NGOs. Aggressive behaviour can lead to reputational damage. However, merging two similarly sized NGOs or joining forces with a more successful one may be the best means to achieve set goals, increase the NGO’s reach, and initiate future projects. Our lawyers advise and support you in all matters relating to such mergers.
Our team is experienced in M&A transactions, and similar requirements also apply to NGO mergers. Both parties must conduct extensive due diligence across the core areas of law, finance, and tax in preparation for the merger. This ensures that there are no unpleasant surprises after the merger. In addition, due diligence allows a party to withdraw from the project at an early stage if it discovers something that could harm it. Our lawyers prepare the necessary documents and monitor the legal requirements to ensure a proper and successful merger.
Although there are some similarities with corporate M&A transactions, NGO mergers also depend on their legal form. For example, the requirements for charitable limited liability companies, such as gGmbH and gUG, differ from those for associations and foundations. It should also be ensured that the merger’s after-effects do not foster hostility. Against this background, a “franchising” arrangement, in which the smaller entity (franchisee) retains some degree of independence, may be better suited to achieving the overall objectives. Other essential factors include the NGO’s specific area of operation and the tax requirements for the respective entities.
Once the merger has taken place, our team will advise on all matters related to the organisation’s management structure, the group’s framework, and the restructuring required to ensure continued success. With our experienced lawyers on your side, you can act confidently with the knowledge that our team will support you throughout the process.
Reputation Protection | Whistleblowing
It is vital for non-profit organisations to maintain their good reputation. Allegations of corruption, illegal activities, or poor working conditions can cause you to lose the support of those interested in your cause. It is crucial to implement efficient whistleblowing systems to ensure the long-term success of an NGO and comply with the legal regulations that have now come into force. Without such systems, employees who want to uncover wrongdoing in your organisation can feel motivated to go public. This can lead to significant reputational damage and revenue loss.
Since the Whistleblower Protection Act came into force on 2 July 2023 in Germany, all legal entities with 50 or more employees are obliged to set up internal reporting units (by Section 12 HinSchG). This obligation applies regardless of legal form and, consequently, also applies to non-governmental organisations (NGOs). Those who fail to fulfil this obligation will face considerable legal consequences from December 2023, including heavy fines.
The German law firm Schlun & Elseven Rechtsanwälte offers skilled, committed legal services to help non-governmental organisations meet this legal requirement. Our lawyers will advise you on the specific preventive measures you can take to prevent whistleblowing and fulfil all legal obligations effectively. By implementing an efficient whistleblowing system certified to the applicable ISO standard, we ensure that whistleblowers are protected by the regulations while your organisation benefits from the information. We work on your behalf to protect your rights and interests as a non-governmental organisation.
Practice Group: German NGO Law
Practice Group:
German NGO Law
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