Term and general definition of the corporate association
Die Corporate Association is a term from public law that refers to a special form of public-law corporation. Corporate associations possess the right of self-administration and are equipped as legal entities with independent rights and obligations. They have a special relationship with the state and fulfill public tasks on their own responsibility, but under state legal supervision.
Unlike public-law institutions or foundations, corporate associations are always composed of natural and/or legal persons who obtain membership by law, statute, or admission resolution. The corporate association acts as a legally independent association with sovereign enforcement of tasks.
Legal foundations of the corporate association
Classification under corporate law
The corporate association is a form of public-law corporation. It is established by the legislator through law, ordinance, or as a result of a sovereign act of authority, and thus acquires legal personality. In § 2 para. 1 VwVfG, corporations – and thus corporate associations – are named as bodies carrying out public administration.
Formation and legal nature
The foundation generally occurs by law (e.g., municipal corporations in accordance with Art. 28 GG), in individual cases also by government act or upon request of existing interest representatives (such as chambers). The corporate association fulfills sovereign tasks by law and is equipped with its own bodies (e.g., board, assembly). It acts in its own name and can sue or be sued (§ 78 VwGO).
Characteristics of the corporate association
- Membership association: Membership is constitutive. Members are natural or legal persons. Membership may be voluntary or compulsory (mandatory membership).
- Sovereign tasks: It assumes public duties within its own sphere of responsibility. This includes in particular the regulation and administration of its own affairs.
- Self-administration: Within legal boundaries, there is far-reaching autonomy in internal organization and in fulfilling tasks.
- Own statutory authority: Corporate associations may adopt their own statutes, which are binding for their members.
- State supervision: There is state legal supervision, not subject-matter supervision.
- Compulsory membership in public-law chambers: In particular, chambers (chambers of crafts, chambers of industry and commerce, medical associations) have statutory or legally mandated compulsory membership.
Types and examples of corporate associations
Public-law corporations with membership structure
The most practically significant corporate associations are:
- Municipal corporations: Municipalities, cities, districts, whose members are the residents or local inhabitants.
- Professional corporations: Chambers of crafts, chambers of industry and commerce, bar associations, medical associations.
- Social insurance organizations: Nursing care funds, statutory health insurance funds as self-administration corporations.
- Religious and ideological communities: (§ 140 GG in conjunction with Art. 137 WRV) with corporate rights.
Distinction from other corporations
Public-law institutions (e.g., broadcasting institutions, universities) and public-law foundations are not considered corporate associations, since they lack a membership structure. The same applies for private-law associations.
Membership law
Acquisition and loss of membership
Membership in a corporate association occurs by law (e.g., as a resident of a municipality) or by admission (in chambers). Termination of membership is governed by legal provisions or the statutes of the respective corporation.
Rights and obligations of the members
Members are entitled to participate in the decision-making process (e.g., voting rights in municipal elections) and are subject to the statutes of the corporation. Contribution or levy obligations are often required by law.
In cases of compulsory membership (e.g., professional chambers), this is indispensable to ensure effective self-administration in the public interest and is fundamentally permitted by constitutional law according to Art. 9 GG.
Organization and organs
The organization of the corporate association follows the principle of self-administration. The core bodies are typically
- Representative body (e.g., board, municipal council)
- Executive body (e.g., president, mayor)
- General meeting or assembly of members
The statute regulates the competences, elections as well as the rights and obligations of the bodies. Resolutions of the bodies are binding for the corporation but are subject to control in accordance with state legal supervision.
State supervision and legal control
Forms of supervision
State supervision encompasses
- Legal supervision: Monitoring the legality of the actions of the corporate association.
- Subject-matter supervision: Only possible if self-administration is withdrawn, to ensure correct performance of tasks.
Measures such as the right of objection, substituted performance, or annulment of unlawful decisions are available to the supervisory authority.
Legal remedies
Legal remedies are available before the administrative courts against actions by the corporate association. Members may also contest unlawful statutes and resolutions.
Financing and assessment of contributions
Corporate associations typically finance themselves through membership contributions, levies, as well as their own economic activities. For mandatory members, the obligation to pay contributions is legally defined in particular and subject to the principle of proportionality.
Municipal corporations and social insurance organizations also receive financial allocations and other revenues (such as taxes or contributions).
Special functions and significance of the corporate association
Corporate associations occupy a central position in public self-administration in Germany. They ensure proximity to citizens, democratic legitimacy, and personal responsibility in the provision of public services. In the area of professional representation, they serve the organization and regulation of entire economic sectors and efficiently and appropriately fulfill state-assigned tasks.
The constitutional recognition of self-government (Art. 28(2) GG) underscores the importance of the corporate association as a fundamental pillar of public life and the state infrastructure.
Brief overview: A public-law corporate association is a corporation with a member structure, right of self-administration, independent performance of responsibilities in the public interest, and under state legal supervision. Typical examples are municipalities, chambers, and social insurance organizations. They are essential carriers of public administration and links between the state and society.
Frequently asked questions
What legal foundations govern corporate associations in Germany?
In German law, the corporate association is a specifically structured public-law corporation established by law or on the basis of a law. The principal legal foundations arise, among others, from the respective specialist law that constitutes each type of association (for example, the Crafts Code for chambers of crafts or the Chamber Act for chambers of architects). Added to this are the general provisions regarding legal persons under public law in the Administrative Procedure Act (VwVfG) and in the Civil Code (BGB), unless specific statutory regulations apply. Its legal status, tasks, membership, the creation of its bodies, as well as state supervision are precisely regulated in the relevant laws and statutes, with the principle of self-administration under state legal supervision as the central organizational principle.
What rights and obligations arise for members of a corporate association?
Members of a corporate association – generally natural or legal persons who belong by law, such as professionals in chambers – are subject to membership obligation (so-called compulsory membership). This gives rise to numerous obligations, in particular payment of contributions for the financing of the corporation’s mission and participation in self-administration (for example, by voting in the election of organs). In return, there are membership rights, such as the use of the corporation’s services, the right to participation and information, protection of professional interests, and, in the case of interference with member rights, the right to be heard and to judicial review of such measures under § 40 VwGO within the administrative jurisdiction.
To what extent are corporate associations subject to state supervision?
Corporate associations, as self-administration bodies, fundamentally carry out their assigned tasks independently. Nevertheless, they are subject to state legal supervision, but not subject-matter supervision. This means the state only checks that the corporation acts within statutory requirements, not how it carries out its tasks substantively. The competent supervisory authority may object to, annul, or order substitute performance for unlawful decisions or measures if the corporation does not fulfill its duties. The specific arrangement, including the right of objection and approval requirements for essential decisions (e.g., statute amendments or contribution regulations), is determined by the respective specialist laws.
Which organs are provided for a corporate association by law?
The organization of corporate associations is set out in detail by their founding or enabling act and supplementary statutes. Generally, these consist of several bodies, including the general assembly or plenary assembly as the highest decision-making body, the board as the executive body, and, where applicable, additional committees or commissions. The functioning, terms of office, rights and obligations of the members of these bodies, and the options for judicial review of decisions by the bodies are governed by the applicable law and the statute. Democratic legitimacy of the bodies usually occurs through internal elections by the compulsory members.
What legal review options are available to those affected by measures of a corporate association?
Legal acts of a corporate association that infringe upon the rights of individual members are classified as administrative acts pursuant to § 35 VwVfG and are thus subject to the system of administrative legal protection. Affected individuals can, after unsuccessful completion of any preliminary objection procedures (if provided), bring an action before the competent administrative court. The court examines both the formal and substantive legality of the corporation’s actions. In addition, for statutes, particularly those relating to contributions or obligations, there is often the possibility of a judicial review action (Normenkontrollklage) (§ 47 VwGO).
To what extent are corporate associations vested with sovereign powers?
Corporate associations are regularly bearers of public authority and perform sovereign duties within their area of responsibility. This includes the issuance of statutes as autonomous local law, the setting and collection of contributions and fees, regulating the professional activities of their members (e.g., by imposing professional duties or continuing education requirements) as well as disciplinary measures against members up to and including sanctions. The exercise of these powers is always bound by the principle of legality (Art. 20 para. 3 GG) and fundamental rights, and, like all administrative activity, is subject to judicial review.
