Corporate law encompasses many legal forms, which can be grouped into two broad areas: partnerships and corporations. While partnerships include, for example, limited partnerships, general partnerships and partnerships under civil law, corporations include all types of associations (e.g. commercial association), corporations (e.g. GmbH) and cooperatives (e.g. European Cooperative Society SCE). As a specialist lawyer for [link text=”Munich corporate law” id=”74″], I would like to explain a special form of corporation to you in the course of this article: the corporation under public law (KöR).
Public body – definition
In general, a corporation defines an association of legal and/or natural persons who, by working together, pursue a common goal that is not geared towards an individual.
The corporation under public law consists of purely legal persons, which serves as an independent organization under public law and is usually equipped with sovereign powers. Examples of corporations under public law are: communities, local health insurance funds, medical and trade associations, universities or church communities.
The association of legal entities under public law takes on public tasks under state supervision outside of the direct state administration represented by the authorities. The public corporation also has rights and obligations like other corporations and can therefore sue and be sued. In rare cases, these only have partial legal capacity (e.g. the faculties of a university) or no legal capacity at all, such as the parliamentary bodies of the federal, state and local governments. The employees of the public corporation are civil servants and other employees of the public service.
The merger of legal entities under public law is characterized by certain characteristics, which do not always have to apply. These are:
The public body has the right to exercise state authority over companies, natural persons and other institutions.
Individuals and companies are automatically compulsory members based on their place of residence or legal domicile. There are also public corporations where membership is voluntary, such as guilds.
The public corporation usually has permission to hire civil servants.
The characteristics of the KöR can best be explained using the example of the community:
The municipality exercises territorial sovereignty over the residents and companies in the municipal area. Due to their situation, these are obligated members and pay taxes and contributions based on the municipal statutes. The municipality has the ability to serve as an employer because it employs civil servants.
The different types of KöR
The regional authority is the supreme territorial body under public law. The federal and state governments form the highest level. The lowest level includes the municipalities.
Self-Governing Bodies/Personal Bodies
Such a public body takes on state tasks that are to be regulated by the members on their own responsibility. Therefore, from an organizational point of view, they are separated from the state administrative hierarchy and transferred to organizations with legal capacity.
For example, in the State Medical Association, the doctors themselves decide about their affairs, as do the lawyers in the Bar Association. Despite the organizational outsourcing from the state sector, these bodies are part of the public authority. They are therefore of course bound by the law and are also subject to state legal supervision.
Unlike self-government and local government, the membership of the public corporation is tied to certain real things, such as land ownership. Examples are water and soil associations, dyke associations or real communities.
Non-state bodies (public law)
The status as a corporation under public law is also granted by the state to organizations that are part of society itself and therefore do not fulfill any state tasks. The purpose of this is that certain organizations receive a special kind of recognition for the work they have done. Examples of associations under public law are the Bavarian Farmers' Union and the Bavarian Red Cross.
The fact that it is a public body that is not part of the state raises questions in terms of fundamental rights, state supervision, public procurement law, official liability and the applicability of official offences.
Religious and ideological communities under public law
According to the Basic Law, religious and ideological communities can also be regarded as public corporations. This is the case when such bodies, such as churches, support the state in the sense of creating and maintaining a canon of values. They achieve this by promoting peace, justice and values and by recognizing the state monopoly on the use of force and punishment. This cooperation between the state and religious communities is expressed, for example, in the provision of religious instruction in schools or in the tax exemption of donations.
Public corporation - conclusion
The public body serves public law and often has sovereign powers. It is either the state itself (federal and state governments) or members of the state administration which, depending on the type of entity, have full legal capacity. Examples of a corporation under public law are communities and districts (regional corporation), medical or bar associations (self-governing corporations), the Bavarian Red Cross (non-state, public corporation), dyke associations (real corporation) or parishes (religious and ideological communities).
If you are a member of a corporation under public law and need legal advice, I, Dr. Andrelang, LL.M., will be happy to help and advise you. Make an appointment now.
You can find other interesting topics related to corporate law on my blog.
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