Eingetragene Genossenschaft
Encyclopedia
An "eG" or eingetragene Genossenschaften is a "registered cooperative society" under German Law. Unregistered cooperatives are also possible in Germany but practically never used in practice. In 2004 there were 5470 registered cooperative societies.

"eG"'s are relatively rare commercial entities in Germany.

In some ways they're similar to registered associations (i.e. "eV" or eingetragenen Verein
Eingetragener Verein
Eingetragener Verein is a legal status for a registered voluntary association in Germany and Austria. While any group may be called a Verein, registration as eingetragener Verein holds many legal benefits because a registered association may legally function as a corporate body rather than just...

)) except for that the fact that an "eG" may carry out "commercial operations" whereas a "registered association" (i.e. club) is specifically restricted under German law section Section §21 of the German Civil Rights Act or "Bürgerliches Gesetzbuch(BGB)" to being a "non-economic association" i.e. it may not carry out any commercial business operations.

They are a special form of commercial association established to reduce barriers of entry for specific activities that lie in the public interest. The "eG" seems like a mixture of capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

 (especially Company) and an association.

These organizations have limited liability for their members with regard to debt repayment. The private assets of "eG" members can never be called on by the "eG" or its creditors to pay for an debts that the "eG" may incur. Under the "eG" rules it is also possible that certain funding commitments of its members also repaid in the case of a bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....

. Participants in an "eG" must be legal "members" of their "eG". In addition, "eG"'s are subject to compulsory audits under law. Mandatory membership and audit costs can be considerable financial burdens for new and small cooperatives.

The organization must promote the interests or business of its members, or their social or cultural interest through their joint operation under Section §1 of the German Cooperative Society Act or "Genossenschaft Gesetz(GenG)" It is a legal person under Section §17 of the German Cooperative Society Act or "Genossenschaft Gesetz(GenG)" and
Under German commercial law an eG is recognized as a form of merchant. Section §2 of the German Commercial Law Act or "Handelsgesetzbuch(HGB)".

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