Concept and Fundamentals of the Shared Office Arrangement
A shared office arrangement in the legal context refers to the association of several self-employed professionals who use shared premises and, as a rule, shared infrastructure, but operate entirely independently in their professional activities. Unlike a civil law partnership (GbR) or other forms of company, there is no joint practice of the profession or collective assignment or commissioning. The members of the shared office arrangement remain legally and economically independent of each other.
Legal Basis and Qualification
Distinction from Other Forms of Association
The shared office arrangement is to be strictly distinguished from other forms of professional association:
- Civil Law Partnership (GbR): Here, several persons join together to pursue a common purpose and are jointly liable. In the shared office arrangement, however, there is no common business purpose.
- Professional Partnership: A legally independent corporate form in which the professional activity is carried out jointly.
- Medical/Dental/Other Practice Partnerships: Similar models in some freelance professions, but with differing liability and organizational structures.
The core of the shared office arrangement is therefore always the mere use of shared infrastructure (such as premises, technical facilities, reception staff) without mutual obligations towards clients or customers.
Contract Drafting and Legal Design
The formation of a shared office arrangement typically takes place via a private law contract. This sets out the rights and obligations of the participants. Important contract contents generally include:
- Arrangements regarding cost sharing: Distribution of ongoing costs for premises, equipment, personnel.
- Use of shared resources: Specification of which areas are used jointly and which exclusively.
- Administration of joint affairs: Organization of administrative tasks.
- Termination of the shared office arrangement: Modalities for dissolution and allocation of common assets.
Since no common partnership assets arise and there is to be no external representation as a single entity towards customers or clients, the contract for a shared office arrangement differs fundamentally from partnership agreements.
External Presentation and Liability
A key legal criterion is the external presentation. Members of the shared office arrangement must always make it clear that they act independently of each other. Any external presentation that gives the impression of a legal partnership is to be avoided. This applies particularly to:
- Letterheads and law firm signs: Each member must be clearly identifiable and named individually; no joint company name.
- Websites and advertising materials: Clear separation of areas of responsibility and clear individualization.
Liability Issues
Within the shared office arrangement, there is no joint and several liability. Each professional is liable solely for their own activities. However, if a member nonetheless initiates or processes a matter concerning another member, an apparent or tolerance authority could lead to liability if the impression of cooperation beyond the shared office arrangement is created.
This makes internal and external separation especially important; otherwise, in cases of incorrect communication or referral of clients, implied company liability may be assumed.
Tax Treatment of the Shared Office Arrangement
Personal Income Tax Aspects
Since the members of the shared office arrangement do not engage in joint profit-generating activities, profits and losses are allocated individually. Only the shared costs are claimed proportionally as business expenses. Tax authorities regularly examine whether there is truly only a cost-sharing group, not a commercial partnership.
Value Added Tax (VAT)
Each member is independently responsible for VAT obligations to the extent that they provide their own services. Payments between members for jointly used infrastructure are regarded as taxable supplies if the right to input tax deduction exists.
Trade Tax
As long as freelance activities are performed, there is no trade tax liability. However, if the activity exceeds the scope of freelance professions, a commercial partnership for tax purposes could be assumed, especially if there is a collective external appearance.
Data Protection and Professional Regulatory Requirements
Confidentiality and Data Protection
Since sensitive data is regularly processed within the shared office arrangement, the requirements of data protection laws, in particular the GDPR, must be observed. The separate handling of clients’ files requires measures to ensure confidentiality, such as physical and technical separation of workspaces, secure storage of files, and separate IT systems to prevent unauthorized access.
Professional Regulatory Implications
Depending on the professions involved, there are different professional regulatory requirements for operating a shared office arrangement. Central requirements concern in particular:
- Independence and Personal Responsibility: Ensuring that each participant acts independently and autonomously.
- Confidentiality Obligations: Prevention of any mixing of personal and confidential information.
Professional codes of conduct typically require clear identification and consistent separation both externally and internally. Violations may result in sanctions, up to and including disciplinary proceedings.
Dissolution and Liability after Termination
If a shared office arrangement is dissolved, the modalities for dividing common assets and terminating jointly entered contracts (e.g., tenancy agreements, jointly employed staff) must be regulated. There is no post-termination liability to third parties as long as individual responsibility has been clearly communicated.
Summary
A shared office arrangement is a form of association that allows for the joint operation of office premises and infrastructure without creating a legal partnership. For members, clear separation of activities is essential to exclude joint liability. Contractual rules, careful coordination of external communications, compliance with tax and professional regulations ensure the legally secure use of this organizational form.
Keywords: Shared office arrangement, legal basis, contract, liability, tax, data protection, professional practice, external presentation, differentiation, dissolution
Frequently Asked Questions
Who is liable for damages or debts in a shared office arrangement?
In a shared office arrangement, each partner is generally responsible for their own liabilities, unless otherwise agreed. Legally, this means there is no joint and several liability for mistakes or debts of other members, as long as it is genuinely a shared office arrangement and not a civil law partnership (GbR) or a professional partnership. Strict separation of mandates, correspondence, and invoices is particularly important to prevent vicarious liability. However, joint contractual relationships, for example for tenancy or shared infrastructure, may lead to joint and several liability to the landlord or third parties if the contract is signed collectively. Therefore, relevant contracts should clearly regulate who assumes which obligations in order to prevent unwanted liability.
Do contracts inside and outside the shared office arrangement need to be concluded separately?
Yes, from a legal perspective, it is essential that each partner enters into their professional contracts on their own account and in their own name. This applies in particular to engagement contracts, service contracts with clients, and supply contracts. Contracts concerning the shared office, such as the lease, jointly used service contracts (e.g., cleaning service, telecommunications), may, depending on their purpose, be concluded jointly. It should be noted, however, that this may involve joint liability. Such contracts should be carefully structured, if necessary with internal agreements on cost allocation and liability distribution. Clear separation not only prevents liability risks but is also a professional requirement in many liberal professions.
How does a shared office arrangement affect confidentiality obligations?
Compliance with confidentiality obligations is a central legal concern for any shared office arrangement. Professions bound by legal confidentiality, particularly lawyers, tax advisers, or doctors, must ensure organizational measures so that unauthorized persons have no access to confidential data. Within the shared office, this means strict spatial separation of workplaces and separate management of files are required. Shared secretariats or reception areas are only permissible if the confidentiality required by professional codes is maintained. Violations can result in severe sanctions, up to loss of professional license. Written agreements on maintaining confidentiality among members are recommended.
Are there any tax law specifics in a shared office arrangement?
The tax treatment of a shared office arrangement differs significantly from that of a civil law partnership (GbR) or other collaborations. Since each partner operates on their own account, they declare and pay tax on their own professional income. The costs for infrastructure or personnel shared among all are regulated in a cost allocation agreement and deducted as business expenses accordingly. However, problems may arise with regard to VAT, for example through the reallocation of costs (so-called ‘genuine’ and ‘non-genuine’ pass-through items), which makes careful contractual arrangements necessary to avoid ‘sham self-employment’ or unwanted VAT obligations. Bookkeeping must be kept strictly separate. In case of uncertainty, timely consultation with a tax adviser is recommended.
What needs to be considered when resigning from a shared office arrangement?
If a member leaves the shared office arrangement, various legal implications result. First, it must be checked whether a joint tenancy agreement or a framework agreement for use of infrastructure exists. If so, resignation may affect the continuation of the contract and the financial burdens of the remaining members. Internal agreements frequently provide for notice periods and the handling of jointly acquired equipment. Legally, care must be taken to ensure that upon departure, liability risks and mutual obligations (such as for jointly hired staff or shared services) are resolved—typically by a settlement agreement. Information requirements towards contracting parties and, for professionals subject to confidentiality, the chambers, should also be observed.
What obligations exist concerning external presentation and self-representation?
The legal distinction from a civil law partnership must be particularly observed in external presentation. No impression of joint professional practice—i.e., as a partnership or association—may be given to avoid shifting liability to joint and several liability of members. This specifically concerns letterheads, websites, firm signage, and advertising materials. Each person must present themselves as an independent professional. A correspondence address (‘in the offices of …’) is permissible as long as it is explicitly stated that it is a shared office arrangement and the offers of those acting individually are legally separated from each other. Mixing these could have not only liability implications, but also disciplinary repercussions.
What legal requirements exist for the organizational separation of work areas?
Strict organizational separation of work areas is a prerequisite for ensuring the shared office arrangement is not classified as a legal company. This means each partner must have their own work equipment, their own files (physical and digital), separate bookkeeping, distinct email addresses and phone numbers. Access control to sensitive areas and records is also important, especially for professions bound by confidentiality. Mixing, such as working together on matters, is expressly prohibited and would result in classification as a partnership—with correspondingly different liability and tax consequences. Compliance with these requirements should also be documented in the internal agreement.
