Definition and classification of public law corporations
Public law corporations are independent, membership-based organizations established by law, statutory order, or state recognition to perform public tasks in their own name and with autonomous administration. They differ from public law institutions and foundations particularly through their membership structure and membership obligations.
Distinction from other public legal entities
Public law corporations are part of what are known as public-law organizations. In contrast to institutions, which typically have users, and foundations, which represent earmarked assets, corporations are characterized by comprising groups of persons whose affiliation is established by law, statutes, or administrative act.
Legal basis and organizational structure
Legal foundations
The establishment, organization, and scope of activities of public law corporations in Germany are governed by the relevant sectoral laws—for example, the Basic Law (Art. 28 GG), state constitutions, corporation and administrative statutes, as well as specific regulations for individual corporations.
Corporations with legal capacity versus those without legal capacity
Public law corporations are predominantly organizations with legal capacity, serving as holders of their own rights and duties. Corporations without legal capacity are rare and may only arise under certain conditions, for example, as unincorporated divisions of public law corporations.
Self-administration and autonomy
A central feature is self-administration: the corporations fulfill the public tasks assigned to them in their own name, under their own responsibility, and often independently of detailed state supervision. Typical bodies are the general assembly, board of directors or presidents, and often their own administrative committees may exist.
Membership and compulsory membership
Voluntary and mandatory membership
Membership in a corporation can be voluntary (for example, religious communities) or mandatory (compulsory membership, e.g., chambers of industry and commerce). Membership is regularly a fundamental prerequisite for rights and obligations within the corporation.
Legal consequences of membership
Members are subject to the statutes as well as the other public-law regulations of the corporation. This includes compliance with organizational requirements, payment of contributions, and, if applicable, participation in the governing bodies.
Types and forms
Territorial corporations
This includes the federal government, states, districts, municipalities, and municipal associations. Territorial corporations are defined by a particular territory and the persons living there; their duties cover all public administration within their area.
Personnel, association, and other corporations
- Personal corporations: Group natural persons according to specific characteristics, e.g., professional corporations such as medical associations or bar associations.
- Association corporations: This category includes, in particular, churches, higher education institutions and universities, and also social security providers (health insurance funds, pension insurance) as public law corporations.
- Other corporations: Special forms such as chambers of crafts, student unions, and public broadcasting institutions may fall into this category.
Sovereign authority and tasks
Exercise of sovereign powers
Public law corporations regularly have the right to issue statutes and the ability to impose contributions or fees, and in many cases, the right to enforce public-law obligations, up to issuing administrative acts.
Typical fields of activity
The responsibilities of public law corporations include, among others, the practice of professions (professional chambers), management of social interests (social security institutions), public safety and order (municipalities), education and science (universities), but also public services and representation of interests.
Legal supervision and oversight
Legal and technical supervision
Corporations are subject to state legal supervision, i.e., oversight regarding the legality of their actions. In individual cases, there is also technical supervision, which then also concerns matters of appropriateness, efficiency, and purposefulness in specific instances.
Judicial supervision
Legal protection is generally provided before administrative courts, with corporations acting outwardly as administrative bodies and possibly as defendants. Internally, particular legal remedies are set out in the statutes.
Financing
Funding through membership fees and charges
Funding is regularly provided by contributions, fees, or levies from obligated members and through government allocations. Territorial corporations usually also have their own budgets and tax revenue.
Asset management
Corporations independently manage their assets and draw up their own budgets in accordance with the principles of fiscal management and statutory requirements.
Dissolution and legal succession
Corporations may be repealed, dissolved, or transformed by law. The succession and continuation of assigned rights and obligations are governed by the respective dissolution law or the transferring statutory provision.
Specifics in the international context
The structure and significance of public law corporations vary internationally. In German-speaking and continental European legal systems, they are a central structural feature of administration, whereas comparable structures are less pronounced in the Anglo-American legal system.
Literature and sources
- § 28 GG – Basic Law for the Federal Republic of Germany
- Municipal law relating to administrative organizations in the states
- Specific sectoral laws (e.g., Trade and Crafts Code, Social Code)
- Specialist literature on public-law administration and administrative law
Conclusion: Public law corporations are key agents of public tasks in the German legal system. They are independently responsible for self-administration, undertake administrative functions for the state and society, finance themselves through contributions, fees, and, if applicable, public funds, and are subject to state legal supervision. Their number and variety make them a significant element of public administration and public life.
Frequently asked questions
What responsibilities and powers do public law corporations have in the German legal system?
Public law corporations perform sovereign tasks on behalf of the state or a territorial corporation. Their key powers include self-administration within legally defined spheres of responsibility (e.g., universities, medical or chambers of commerce), issuing statutes (legal rules) that have regulatory effect for their members, and exercising compulsory powers, such as collecting mandatory contributions or enforcing professional obligations. These responsibilities and powers must be conferred by law and must not undermine the state’s monopoly on the use of force. They are always subject to the principle of proportionality and supervision by state authorities.
What rights of participation and involvement do members of a public law corporation have?
Members of a public law corporation have extensive participation rights, which are fundamentally governed by the statutes or the enabling law of the respective corporation. Typical forms include the right to vote for corporate bodies (such as representative assemblies), the right to information about the corporation’s work, the opportunity to submit motions or complaints, and the right to participate in decision-making processes. Frequently, bodies are composed of representatives of the members, ensuring democratic legitimacy within the framework of self-administration.
What legal supervision is exercised over public law corporations?
Public law corporations are subject to state legal supervision. This supervision serves to ensure that the corporation complies with legal requirements and does not exceed its powers. Legal supervision does not entail direct involvement in ongoing self-administration, but a review of the legality of measures taken or statutes issued. Supervisory authorities may impose orders in the event of legal violations to correct misconduct or repeal certain acts contrary to statute. The extent of supervision differs depending on the type and field of the corporation but is always limited to ensuring compliance with the legal framework.
How are the bodies of a public law corporation constituted and what tasks do they perform?
The organs of a public law corporation are governed by legal provisions and the corporation’s statutes. The main bodies in many corporations are the board, a representative assembly, or a president. Formation normally takes place by election, appointment, or selection, with details varying according to the type of corporation. The bodies conduct management, legally represent the corporation, are responsible for managing member records, conducting elections, and drafting and implementing statutes. Decisions are generally made collectively and can be subject to judicial review.
What financial independence do public law corporations enjoy?
Public law corporations are entitled to prepare and manage their own budgets. They are permitted to raise revenues—particularly in the form of compulsory contributions from their members, fees, or special levies. Nevertheless, their financial independence is embedded within the statutory framework and subject to audit by state authorities. In addition, corporations may only use public funds for their intended purpose and, in the case of economic activities, they must observe the principles of nonprofit status and competition law.
How is the dissolution or transformation of a public law corporation carried out?
The dissolution or transformation of a public law corporation generally requires an enactment of law or regulation, as they are derived from public law. The reasons for dissolution are varied and range from a redistribution of the state’s tasks to a merger with other corporations. The process is regulated by law, including provisions on the distribution of assets, the handling of outstanding legal relationships, and the continued protection of members’ interests. The state supervisory authority oversees and reviews the legality of the entire process.
