Concept and legal classification of the Freiverband
The legal term Freiverband occurs especially in the context of German association law and general civil law. A Freiverband, often also referred to as a “non-legal-capacity association”, is an organizational form that brings together several people for a common purpose without attaining legal capacity under Sections 21 et seq. BGB (German Civil Code). These associations exist and act effectively in legal relations, but are not legally treated as independent legal entities distinct from their members.
Distinction from other types of associations
The Freiverband differs significantly from the following types of associations:
- Legal-capacity association (Section 21 BGB): This attains legal capacity through entry in the register of associations and thus becomes a legal entity.
- Civil law partnership (GbR) (Section 705 BGB): Here, contractually binding relations exist and there is a clear focus on pursuing a common purpose; it is not a corporation.
- Association in the sense of other special laws: Such as political parties or trade unions, which are governed by specific statutory provisions.
In contrast, the Freiverband is a personal association with its own constitution or rules, but does not have formal recognition as a legal entity.
Legal character of the Freiverband
Legal nature and representation
Freiverbände are not legal entities, meaning they cannot themselves bear rights and obligations. However, the courts treat them as so-called partially legally capable partnerships or, in certain situations, as “non-legal-capacity associations”. Actions and declarations of intent are made in the name and for the account of the acting members or the officers appointed by the membership assembly (for example, the board).
Statutory basis
The Freiverband is not subject to any special statutory provisions, but operates within the framework of general legal principles, in particular
- Sections 21 et seq. BGB (analogous to association structure)
- Sections 54 BGB (contract law for non-legal-capacity associations)
- Principles of representation and participation
The internal organization is governed by constitutions, the binding force of which is based on the members’ self-commitment.
Legal capacity in legal transactions
Although Freiverbände do not possess independent legal personality, they are, in principle, capable of acting and being a party as an association, to the extent necessary to achieve the association’s purpose. For example:
- Obligations arising from contracts primarily establish liability for the members authorized to represent the association.
- Legal actions and litigation are usually conducted under the collective name (such as the association’s name), but the natural persons authorized to represent are the ones entitled to sue or be sued.
Liability
Contractual and tort claims are regularly directed against the natural persons acting in the name of the Freiverband. The internal regulations (constitution) may contain different liability provisions; however, these are not binding on third parties.
Assets
The assets formed by the Freiverband are regarded as “tied special assets” and are held collectively by the members. Due to the lack of legal capacity, the association itself cannot acquire ownership of the assets; instead, one or more natural persons are assigned as trustees.
Types and examples of Freiverbände
Freiverband in labor law and collective bargaining
In collective labor law, the term Freiverband regularly refers to an employee or employer association that is not recognized as capable of collective bargaining (tariffähig) within the meaning of Section 2 TVG (Collective Agreements Act), as it lacks social power or does not fulfill the legal requirements of an association under German labor law. Such Freiverbände can nevertheless become members of umbrella organizations, but are not themselves directly party-capable within collective bargaining law.
Freiverband in association law
Within the field of associations, there are many informal groups, such as leisure groups, clubs, or social initiatives, which deliberately choose not to register as associations and thus act as Freiverbände. They manage their affairs according to their constitutions, but do not possess civil law capacity to act.
Freiverband in cooperative law
Historically, numerous economic or professional associations emerged as Freiverbände, before later being specifically regulated by law (such as cooperatives or guilds).
Significance and practical relevance
Despite their lack of legal independence, Freiverbände have significant social importance. They allow for flexible organization without the effort or strict requirements of registered associations. Their existence is part of the freedom of association under Article 9 Basic Law (Grundgesetz) and is protected by constitutional law. Nevertheless, Freiverbände must take into account their limited possibilities in legal transactions, particularly with regard to assets and liability.
The establishment of a Freiverband is therefore particularly advisable for informal, manageable groups without long-term charitable or economic purposes.
Literature and further regulations
For in-depth legal assessment and structuring of a Freiverband, relevant legal commentaries and current court decisions (especially from the Federal Court of Justice and labor courts), in addition to the BGB, should be consulted. Specific organizational, tax, or liability-related issues should be addressed taking into account the respective constitution and the practical needs of such an association.
Summary:
The Freiverband is a widespread form of non-legal-capacity association, the legal treatment of which is mainly governed by general civil law, in particular association law under the BGB. It has neither legal capacity nor ownership, but can act as a unit in legal transactions. This requires members to pay particular attention to liability, representation, and asset management.
Frequently asked questions
What legal requirements must be met to establish a Freiverband?
The establishment of a Freiverband is not expressly regulated in German law but results from the general freedom of association under Article 9(1) of the Basic Law. At least two natural or legal persons must join together for a common purpose, intended to be permanent. No specific legal form is required; often, a constitution as a non-registered association pursuant to Sections 54 BGB is chosen, with the association not attaining independent legal personality, though partial legal capacity may be possible. Establishment requires only an informal agreement; notarization or registration is not necessary. Nevertheless, a constitution and internal rules regarding organization, decision-making, and representation should be adopted to ensure internal order and legal certainty externally. Depending on the activities, further legal requirements, such as criteria for charitable status or specific reporting obligations, may also apply.
What statutory basis applies to the activities of a Freiverband?
The primary legal basis for the activities of a Freiverband is its constitution, where one exists. Supplementary provisions of civil law partnerships (Sections 705 et seq. BGB) and, in part, those of unregistered associations (Section 54 BGB) apply. Though not a legal person, the association can act as a partially legally capable association in legal transactions, especially if it participates in such transactions and establishes its own rights and obligations. Depending on the association’s activities, further legislation may apply, such as antitrust law (Sections 1 et seq. GWB), labor law, or tax regulations. Basic rights, such as freedom of association and equal treatment, also provide a central legal framework.
To what extent is a Freiverband liable for its obligations?
A Freiverband is generally not liable as an independent legal entity, as it is not a legal person. Legal relationships are often established in the association’s name but directly for and against the acting members. According to case law, under certain conditions—especially if acting externally in its own name and as an association—partial legal capacity may be assumed, so that the association itself can participate in legal transactions and thus bear rights and obligations. However, in doubt, the acting persons or members are jointly and severally liable under the rules of a civil law partnership (Sections 705 et seq. BGB), unless a different distribution of liability has been contractually or constitutionally agreed.
Is there a registration requirement for a Freiverband?
There is generally no registration requirement for a Freiverband, as it regularly acts as a non-registered association or as a civil law partnership. The Freiverband may voluntarily seek registration in the competent register of associations to be recognized as a registered association (e.V.), but this is linked to specific formal and legal requirements. If registration is not pursued, the association is legally treated as a non-registered association or as a civil law partnership under the BGB. Reporting obligations to other authorities may arise, however, from specific activities or industries, such as economic activity, tax matters, or in dealings with social insurance institutions.
Is a Freiverband subject to supervisory regulations?
Freiverbände are generally not subject to comprehensive state supervision. Administrative supervision—such as that for registered associations or foundations—does not exist for non-registered Freiverbände. Only in specific applications might limited state oversight apply, for example, if the association pursues charitable purposes (review by the tax office in accordance with the Fiscal Code) or operates in certain professional contexts (e.g., professional associations with expert oversight). Otherwise, associations are monitored internally by their members and the rules in their respective constitutions.
What are the legal consequences arising from the activities of a Freiverband with regard to tax law?
The activities of a Freiverband can have various fiscal consequences. Regardless of registration, it must first be examined whether taxable income exists or charitable purposes are pursued (Sections 51 et seq. AO). If the association achieves charitable status, it benefits from tax advantages such as exemption from VAT and corporate income tax. If it engages in business activities, it is subject to regular corporate taxation, with liability for taxes potentially passing to the acting members if the association itself is not recognized as a fiscal entity. When generating income, proper bookkeeping and filing of tax returns are also required. Special attention should also be paid to the deduction of wage tax and social security contributions if the association has employees.
Can Freiverbände act collectively, for instance, conclude collective bargaining agreements?
Freiverbände can act collectively, especially in connection with employment relations. However, the ability to conclude collective agreements requires collective bargaining capacity under Section 2 TVG (Collective Agreements Act), which generally depends on the social strength and representativeness of the association. A Freiverband that is sufficiently organized and represents a relevant number of members in a sector can be recognized as capable of collective bargaining and enter into collective agreements. This ability is often subject to legal examination, especially by the labor court, which has the authority to decide conclusively on bargaining capacity. The association thus bears significant responsibility for the lawful implementation and compliance with collective agreements within its area of responsibility.
