Definition and Legal Classification of Public Law Corporations
A public law corporation is an organization endowed with its own rights and obligations to which a part of public administration has been delegated by law or on the basis of a law. It is characterized by the membership of its affiliates, the exercise of sovereign duties, and the participation in self-government rights. Public law corporations are key entities of public administration. Among their best-known forms are municipalities, administrative districts, universities, chambers of commerce, and social insurance institutions.
Legal Bases
The legal basis for public law corporations is laid down in respective national law, particularly in Germany by the Basic Law (Grundgesetz, GG), state constitutions, and specific specialized laws (e.g. municipal constitutions, chamber laws, Social Code). Their establishment is by law, while self-government is guaranteed by Art. 28 para. 2 GG.
Characteristics and Features of Public Law Corporations
Sovereign Functions and Self-Governance
Public law corporations are established to independently fulfill certain administrative duties in the public interest. They possess self-government authority, i.e., they can act independently within their legally defined scope of duties and enact statutes. Members have participation rights, e.g., by electing bodies.
Membership and Compulsory Membership
Membership in a public law corporation can be voluntary, but often also exists as compulsory membership (e.g. for professional chambers). Membership establishes rights and obligations (such as contributions, participation rights).
Statutory and Contribution Sovereignty in Public Law
Corporations can issue general legal norms for their members by statute, provided such statutes are authorized by law. They are also often empowered to levy contributions or dues from members (statutory autonomy and financial sovereignty).
Organizational Structure
Public law corporations have bodies (board, president, committees) that can be democratically legitimized. Decision-making processes and task allocation are set by law and the corporation’s statutes.
Types of Public Law Corporations
Territorial Corporations
These are corporations with a defined territory and all persons residing or located therein as members. Examples: Federation (Bund), states, administrative districts, municipalities.
Personal Corporations
Their members are defined by personal characteristics (e.g. profession, status). Examples: Medical associations, bar associations, universities as student corporations.
Real Corporations
Real corporations are based on membership by virtue of a common interest or property relationship (e.g. water and soil associations, hunting cooperatives).
Union Corporations
These corporations are formed by the merger of several corporations into an association to pursue common objectives, e.g. association of municipal top organizations.
Areas of Responsibility
The responsibilities of public law corporations range from hazard prevention, public services (such as provision of water, electricity, education and health care), to the management of professional matters and administration of social security systems. In this way, they fulfill essential tasks of the state and society.
Legal Status: Corporation under Public Law
Legal Personality and Legal Capacity
Public law corporations have their own legal personality (they are ‘holders of their own rights and obligations’). They act independently, can enter into contracts, sue and be sued.
Sovereign Rights and Administration
Corporations perform administrative acts, set compulsory contributions, and may – insofar as provided by law – apply coercive measures. They are subject to legal supervision by state authorities.
Proximity to the State and Supervision
Public law corporations are close to the state but independent administrative organizations. State supervision ensures that they act within the framework of the law (‘legal supervision’), intervenes in case of legal violations, but otherwise allows freedom of self-administration.
Distinction from Other Organizations
Difference to Institutions under Public Law
A Institution under public law does not have an organization based on membership but serves the administration of a specific purpose for a changing group of people (e.g. broadcasting corporations, savings banks).
Distinction from Foundations under Public Law
A Foundation under public law consists of a dedicated asset for the permanent fulfillment of a particular purpose. It has a founder but no membership structure.
Relationship to Private Law Corporations
Unlike private law associations (e.g. associations, joint-stock companies), the public law corporation is characterized by the exercise of sovereign powers, compulsory memberships, statutory sovereignty, and supervision.
Establishment, Dissolution, and Change of Status
Establishment is by law or sovereign act of state; the same applies to dissolution or change of status. Transitional and transfer provisions for members and assets must be observed as provided in the respective regulations.
Significance and Function
Public law corporations contribute significantly to the performance of public tasks, democratic legitimacy, citizen participation as well as the organization of self-government and public services. They ensure decentralized, citizen-oriented design of state administrative tasks and provide reliable organizational structures for different segments of society.
References and Sources
- Peter Huber: Öffentliches Recht. 3rd edition, Heidelberg 2022.
- Maurer/Waldhoff: Allgemeines Verwaltungsrecht. 21st edition, Munich 2023.
- Hans-Uwe Erichsen, Martin Ehlers (eds.): Allgemeines Verwaltungsrecht. 17th edition, Heidelberg 2021.
Weblinks
- Deutscher Bundestag – Lexikon: Öffentlich-rechtliche Körperschaften
- Bundeszentrale für politische Bildung: Kommunalrecht und Selbstverwaltung
Note: This entry provides a comprehensive and legally sound overview of the term public law corporation with particular focus on the legal, structural, and functional aspects for a legal encyclopedia.
Frequently Asked Questions
What legal foundations govern the establishment and organization of a public law corporation?
The establishment and organization of public law corporations are primarily governed by the Basic Law (GG) as well as the respective specialized laws at federal and state level. Article 28(2) GG, for example, guarantees municipal self-government for municipalities and municipal associations. Specific laws such as corporate law, municipal constitutional law (e.g., municipal codes for the states), university laws, or chamber laws further regulate the organization and tasks of the respective corporations. In addition, statutes adopted by the corporations themselves may play an important role. Establishment regularly takes place by law or corresponding legal ordinance; in rare cases, constitutive recognition by a supervisory authority may be possible. The specific legislation determines the concrete organization, range of responsibilities, membership, and internal constitution of the corporation.
To what extent are public law corporations bound by state instructions and supervision?
Public law corporations generally possess a certain degree of self-governance, but are subject to state legal supervision. State supervision may be exercised as legal or, in certain cases, as technical supervision. Legal supervision is limited to monitoring whether the corporation acts within the law. More extensive technical supervision (e.g. for state authority corporations) can include a review of the expediency of actions. Instructions are only permissible where a law expressly provides for them. In certain situations, corporations may also be instructed by special orders (e.g. for hazard prevention or to safeguard overriding interests). The form of supervision depends on the type and function of the respective corporation.
What types of membership are legally distinguished within public law corporations?
Legally, various forms of membership can be distinguished. Compulsory membership is typical for professional corporations (e.g. bar associations or chambers of industry and commerce), where membership is by law and cannot be opted out of. Voluntary memberships are found, for example, in religious communities recognized as public law corporations. In addition to natural persons, legal persons can also be members under certain conditions. The rights and obligations of members derive from law, statutes, and, if applicable, contribution regulations. Procedures for admission, termination, or exclusion of members are detailed in law and are sometimes subject to judicial review.
What special asset and liability arrangements apply to public law corporations?
The assets of a public law corporation are generally separated from those of the state or region (so-called ‘special assets’). Corporations are liable for their obligations with these own assets. Unlike legal persons under private law, there is usually no personal liability for members; exceptions may be provided by law (e.g. in chambers for certain breaches). Aspects of state liability law are relevant if the corporation, in the exercise of public authority, causes damage (§§ 839 German Civil Code in conjunction with Art. 34 GG). In such cases, the state is liable if the corporation acts as part of state administration.
How is the legality of actions by public law corporations controlled?
Control is exercised both internally and externally. Internally, the statutes or laws provide for organs that oversee management and compliance with legal bases (e.g., audit offices, boards of supervisors, members’ meetings). Externally, control takes place through state supervision, by administrative courts through technical or legal supervision complaints, and through the possibility that affected members or third parties challenge unlawful resolutions or actions. Also, municipal or state auditing can examine the nature and scope of financial and economic management. For professional corporations, there is also professional oversight over members.
Are public law corporations subject to general data protection law and further compliance-based regulations?
Yes, public law corporations are fully subject to the General Data Protection Regulation (GDPR), the Federal Data Protection Act (BDSG), and, where applicable, specific state data protection laws. They must therefore establish data protection management, appoint a data protection officer (if the statutory requirements are met) and grant data subjects the rights entitled to them under data protection laws. Depending on their area of responsibility, additional compliance-related regulations apply, such as public procurement law, budgetary law, tax regulations, transparency and freedom of information obligations, as well as rules for combating corruption and conflicts of interest.
What possibilities for dissolution or transformation of a public law corporation does the law provide?
The dissolution or transformation of public law corporations is only possible under strict statutory requirements and regularly requires a law or a legal ordinance. Grounds for dissolution may include a change in responsibilities, fulfillment of purpose, or comprehensive administrative reform. Upon dissolution, laws typically regulate the settlement of assets (liquidation), the transfer of rights and obligations, and the legal position of members. Alternatively, a corporation may be merged with another corporation or converted into an institution or foundation under public law if provided by law. In all cases, the rights of those involved (such as membership rights or employment claims) must be ensured, and judicial review is possible.
