You have an idea, a partner at your side and the urge to finally build something together, without first fighting your way through red tape and expensive formalities? Then you almost inevitably land at the GbR. The Gesellschaft bürgerlichen Rechts, or civil law partnership, is the simplest way to start a business with a partner in Germany, and that is exactly why so many founding teams take their first step with it. No minimum capital, no notary, very little paperwork. You can often get going the same day.
So what is a GbR, how does the setup work, and what does the whole thing really cost you in the end? This guide explains what the legal form means and walks you through it step by step, from the requirements through the agreement, registration and taxes all the way to dissolution. We show you the advantages as honestly as the drawbacks, add a checklist, and answer the questions that almost always come up at the start. By the end you will know whether the GbR fits your plans.
The key points at a glance:
- A GbR is the simplest legal form for two or more founders with a shared purpose. You need no minimum capital.
- The GbR often forms automatically as soon as the partners join forces. A written partnership agreement is still highly recommended.
- All partners have unlimited personal liability with their private assets. This is the biggest drawback of the legal form.
- Setting up is cheap. In most cases you only pay the trade registration of 20 to 60 euros.
- Since 2024, a GbR can voluntarily register in the company register and then becomes an eGbR.
What is a GbR? Definition and basics
The GbR is the German civil law partnership, and the abbreviation GbR stands for Gesellschaft bürgerlichen Rechts. It is governed by sections 705 to 740 of the German Civil Code, which is why it counts as a partnership rather than a corporation like a GmbH or UG. To set one up, two partners with a shared purpose are enough. That could be a joint practice, a team of tradespeople, or a small start-up that is only just getting going.
Here is the part that surprises many. In a lot of cases a GbR comes into being all by itself, because the moment two people start a business activity together and pursue the same goal, a GbR already exists in legal terms, with no formal act of incorporation. Unlike a sole proprietorship, several people stand behind the business. And unlike the OHG, your activity does not have to be a commercial trade.
Since 1 January 2024 a new partnership law has also applied, which gives the GbR explicit legal capacity and opens a register of its own. Anyone who wants to can voluntarily enter the partnership in the new company register (Gesellschaftsregister), after which it carries the addition eGbR and becomes far more visible to business partners and authorities. In certain cases this step becomes mandatory. As soon as the GbR wants to buy property or hold shares in a GmbH, there is no way around the register.
Requirements for setting up a GbR
The barriers are pleasantly low, and that is one of the reasons so many people choose this legal form. You need at least two partners with legal capacity, a shared purpose, and the honest will to pull it off together. There is no statutory minimum capital. You can contribute whatever you have, whether that is money, assets or simply your own labour.
A written partnership agreement is not mandatory, because in purely legal terms a GbR is valid even on the strength of a verbal arrangement made at the kitchen table. Even so, we strongly advise you to put everything important in writing, because a clear agreement saves arguments later and is worth real money when in doubt. Freelancers register the GbR with the tax office only. Anyone who runs a trade also needs the trade registration.
Advantages and disadvantages of a GbR
No legal form fits every plan, and the GbR is no exception. It wins on a simple start and low costs, while the big catch sits with liability, which all partners carry with their private assets. These points speak in favour of a GbR:
And here is what you should weigh up carefully before you start:
How to set up a GbR: step-by-step guide
How do you set up a GbR? In practice it goes surprisingly quickly, and in many cases the whole path from the first conversation to the first order takes only a few days, two weeks at most. Even so, it pays to work through each step properly. That saves you trouble later. The following six steps take you to the goal in order.
It all starts with the team, and this is a choice you should not leave to chance, because from now on you carry the responsibility together and you are liable together too. Does the chemistry work, do your strengths complement each other, and are you really pulling in the same direction? Then define your shared purpose as clearly as you can, because a precisely described goal makes the later collaboration noticeably smoother. Talk openly and early about expectations, working hours and money.
The partnership agreement is not required, yet it is worth having in almost every case. It settles the points where disputes most often flare up later, namely the purpose, each partner’s contribution, the way profit is shared, the management, along with external representation and clear rules for leaving. Vetted templates help you get started. For larger ventures, legal advice earns its fee.
As soon as your GbR is commercially active you register a trade, and each partner registers the trade individually at the local trade office (Gewerbeamt). The fee is usually between 20 and 60 euros, and the authority handles the rest for you, because it forwards the registration automatically to the tax office and the chamber of commerce (IHK). Pure freelancers skip this step entirely. They turn straight to the tax office. For when exactly a trade is required, see our guide on when you need to register a business.
After registration the tax office gets in touch and sends you the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung), which you fill in conveniently online through the ELSTER portal and in which you state your expected turnover and profit. Shortly afterwards you receive your tax number. This is also where you decide on the small business regulation, which exempts you from VAT as long as your turnover stayed below 25,000 euros last year and does not exceed 100,000 euros this year.
A dedicated business account is not mandatory for a GbR, but honestly one of the smartest decisions you can make early on, because it keeps private and business payments cleanly apart and so makes your bookkeeping and your taxes far easier. With the business account for the GbR from Vivid, you manage your finances digitally. Several partners access the same account. And you keep an eye on every expense together.
Because you have personal liability in a GbR, protection deserves more than a passing thought. For most businesses, business liability insurance forms the foundation, while advisory professions should also consider professional indemnity insurance and, depending on the activity, legal expenses or cyber cover on top. What you really need depends on your business. Better to check it once too thoroughly than too lightly.
GbR partnership agreement: content and rules
The partnership agreement is the heart of your GbR, and it pays off above all when things get tense between you. Without it, the statutory rules of the BGB kick in automatically, and from experience those rarely fit your plans exactly. So it is better to set the key points yourself. When you set up the GbR is up to you, by the way, and a good moment is usually just before the first joint order starts.
These points belong in a solid partnership agreement:
Liability in a GbR
Liability is the point where you should look most closely with a GbR. All partners have unlimited personal liability, and in plain terms that means you answer for the debts of the partnership not only with the business assets but also with your private wealth. This liability is joint and several. A creditor may therefore single out one partner and demand the full amount from them.
The difference between external and internal matters here. Towards third parties each partner is fully liable, while you settle the balance among yourselves afterwards in the internal relationship, according to share and arrangement. The risk can still be contained. Business liability insurance absorbs many claims, clear arrangements in the agreement head off disputes, and anyone who carries a high risk for the long term eventually looks at switching to a UG or GmbH.
Taxes for a GbR
On taxes the GbR follows a principle that catches many people off guard at first. The partnership itself pays no income tax; instead the profit is first calculated for the whole business and then distributed among the partners, who each tax their share through their own income tax. Experts call this the transparency principle. To keep it clean, the tax office assesses the profit separately and uniformly.
Two further types of tax can join in depending on your activity. You show VAT on your invoices, unless you use the small business regulation, and trade tax applies only to commercial activity, where an allowance of 24,500 euros per year applies. A purely freelance GbR pays no trade tax at all. For how this plays out in detail, read our guide to taxes for the self-employed.
Costs of setting up a GbR
If it is mainly the question of cost that is on your mind, we can put you at ease, because the GbR is one of the cheapest legal forms there is. You need no notary and no minimum capital, and in the vast majority of cases you end up paying only the trade registration, which costs between 20 and 60 euros depending on the city. It gets more expensive only once you register the GbR as an eGbR. Then fees for the notary and the register come on top, plus optional legal advice for the agreement.
| Cost item | Typical amount | Mandatory? |
|---|---|---|
| Trade registration | 20–60 € per partner | Yes, for commercial activity |
| Partnership agreement with legal advice | 0–1,500 € | Optional, but recommended |
| Registration as an eGbR (notary + register) | several hundred € | Only if needed |
| Business liability insurance | approx. 100–300 € per year | Recommended |
| Business account | depends on the plan | Recommended |
Dissolving a GbR
A GbR does not simply end on its own, it needs a trigger. The classic grounds include reaching the agreed purpose, a set end date, a resolution by all partners, as well as notice from one partner or an insolvency. So much for the theory. In practice it gets interesting at one point.
Since the 2024 reform an important change applies here that you should know about. If a partner dies or leaves the business, the GbR no longer dissolves automatically, but is instead simply continued by the remaining partners as a rule. Dissolution is followed by liquidation, in which you settle open invoices and deregister the GbR with the trade office and the tax office. At the end, remember the retention periods for your documents.
GbR vs. other legal forms
The GbR is not the only option for your business form, and which one fits best depends above all on liability, capital and effort. A sole proprietorship suits you when you start alone, the UG and the GmbH limit your risk to the company assets and cost more in return, and the OHG is the variant for a commercial trade. For a full overview, see our guide on how to start a company in Germany. The table below sets the key points side by side.
| Legal form | Liability | Minimum capital | Setup effort |
|---|---|---|---|
| GbR | unlimited, personal | none | very low |
| Sole proprietorship | unlimited, personal | none | very low |
| UG | limited to company assets | from 1 € | medium (notary, commercial register) |
| GmbH | limited to company assets | 25,000 € | higher (notary, commercial register) |
| OHG | unlimited, personal | none | medium (commercial register) |
Checklist for setting up a GbR / eGbR
To wrap up, we have bundled all the steps into one checklist that you can simply work through from top to bottom. This is how you set up your GbR or eGbR without detours.
Frequently asked questions (FAQ)
How many partners does a GbR need?
At least two partners are required, while there is no upper limit at the top. Besides private individuals, companies may join as partners too. You cannot set up a GbR on your own, though, because that is what the sole proprietorship is for.
How much starting capital do you need to set up a GbR?
A GbR requires no statutory minimum capital, so you can get going without fixed capital. Each partner makes a contribution, and that need not always be money, because assets or your own labour count too. Whatever each person contributes, it is best recorded in the agreement.
How much does it cost to set up a GbR?
Setting up a GbR is cheap, and in most cases only the trade registration of 20 to 60 euros applies. For a purely freelance GbR, even that fee is dropped. Extra costs arise only once you use legal advice or register the GbR as an eGbR.
When do you have to register the GbR with the tax office?
Right after setup, because without a tax number you may not issue correct invoices. To do this you fill in the tax registration questionnaire, which runs online through ELSTER, and a few days later your tax number arrives.
How is a GbR taxed?
The GbR itself pays no income tax, because the profit is distributed among the partners and taxed by each person individually through their income tax. For commercial activity, trade tax is added once the profit exceeds the allowance of 24,500 euros. VAT is dropped when you use the small business regulation.
Why set up a GbR instead of a GmbH?
As a legal form the GbR is faster, cheaper and less bureaucratic than a GmbH, because you need neither a minimum capital of 25,000 euros nor a notary, and you have less to handle in day-to-day running too. The decisive difference lies in liability. With a GmbH you are liable only with the company assets, with a GbR also with your private assets.
Conclusion
The GbR is ideal for anyone who wants to get going with a partner or a team, without getting lost in capital requirements and notary appointments. It is quick to set up, cheap and flexible, but in return it asks the full liability risk of you, which you best frame with a clear agreement and the right insurance. Anyone who keeps that in view has a strong base with the GbR. And anyone who separates their finances cleanly from the start makes daily life easier from day one.
Ready for a shared start?
Open the Vivid business account for your GbR digitally in just a few minutes. That way you manage your finances in one place from the start.
Note: The content of this blog is for general information only and does not constitute legal, financial, investment or tax advice. All information refers to the status as of July 2026 and may change. Before you make decisions based on this information, you should seek the advice of qualified professionals who can take your individual situation into account.
