Most businesses in Germany are organised either as corporations (GmbH or AG) or as partnerships (GBR, OHG, KG, PartG), for an overview see here. Sometimes, however, one comes across organisations which have the letters “e.V.” after their name. This stands for “eingetragener Verein” meaning “registered association”.
An e.V. under German law is a Körperschaft (corporation), which is defined as being a legal entity which is separate from its members, i.e. not a partnership. An e.V. must be incorporated by at least 7 founding members who adopt a charter (Satzung). Under German law, the e.V. is meant to be used for non-business activities. Therefore, most amateur sports clubs and charities are organised as e.V., see for example the German division of Amnesty International (here), unless a charity is organised as a Stiftung (Trust).
A Verein under German law is not supposed to do profit orientied business activities. In other words: The main goal of a Verein, in contrast to a business, must not be to make money for its members. That is also why they are called members (in German: Mitglieder) and not owners or shareholders. Thus, any profits must not be distributed to its members, but can only be used for the (charitable) cause defined in the Vereinssatzung (charter). An English version of the relevant statutes of the German Civil Code here.
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The law office Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters. If you wish us to advise or represent you please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 785 30 53. Or simply write an e-mail to mail(at)grafpartner.com.