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The law distinguishes between a natural and legal person. A natural person is any human being, with legal capacity commencing from the time of birth. A legal (artificial) person is an association of people or special-purpose fund (e.g. a foundation) that is recognized by law as having legal personality. It differs from other associations of people in that it possesses legal capacity and can appear before the courts as plaintiff or defendant ("Parteifähigkeit", i.e. capacity to be a party in court). A legal person is separate and distinct in law from its members and from their number or changeover. It is an independent legal entity and is in principle protected by basic rights . Its particular name is also protected by law against unauthorized use by third parties. It has the capacity to act and can thus acquire rights and create obligations with binding effect. It does this through its organs, which in the sphere of private-law labour relations are, depending on the form of company , the shareholders' meeting or company general meeting , the supervisory board , the management board or a managing director . It is recognized in case law that a legal person is liable for unlawful conduct on the part of its organs and must pay damages where appropriate.

There is a difference between a private-law and public-law legal person. The society or association (Verein) is regulated in the Civil Code as the basis of legal personality under private law. Other civil-law societies are the private limited company (GmbH), the registered co-operative society (eG), the public limited company (AG) and the partnership limited by shares (KGaA), all with their legal basis founded in separate statutes. Otherwise, in the absence of special regulations the provisions of the Civil Code and the Commercial Code are applied to supplement them. The state also can avail itself of a private-law legal person in executing its functions.

Public-law legal persons exist by virtue of recognition under public law and can be established only by statute or by an act of sovereignty ( act of administration , executive order ) on the basis of a statute.

Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.

Page last updated: 14 August, 2009