Company with Tied Assets (GmgV): Legal Concept and Practical Implications for Businesses

Key takeaways

The proposed Gesellschaft mit gebundenem Vermögen (GmgV) is intended to be an independent German legal form for businesses whose assets are to remain permanently tied to the company and its purpose. Profits would generally remain in the company and be reinvested rather than distributed to members. The concept is based in several respects on the cooperative model, but does not require a minimum number of members.

The terms “GmbH with tied assets”, “GmbH-gebV” and “GmbH-mbV” are frequently used in the earlier academic and political debate. The 2026 framework concept, however, describes the GmgV as an independent legal form alongside the GmbH and the AG. The terminology should therefore be used carefully and always with reference to the relevant proposal or legislative stage.

The GmgV may be relevant for purpose-driven founders, certain family businesses and companies seeking to preserve their independence over generations. It is likely to be less suitable for businesses that depend on venture capital, regular profit distributions, a private exit or participation in the company’s appreciation in value.

1. Background: stewardship and tied assets

The debate is closely connected with the concept of steward ownership or Verantwortungseigentum. The underlying idea is that a company should be managed for its long-term purpose rather than primarily for the short-term private return of its owners.

Two elements are central:

• Self-determination: The persons responsible for the company should retain meaningful influence over its decisions.
• Asset lock: The assets accumulated in the company should not be freely extracted, sold or distributed for private wealth creation.

Existing German structures can replicate some of these elements. They include tailored articles of association, transfer restrictions, voting agreements, foundation structures, holding arrangements and purpose-oriented participation models. These solutions can, however, be complex and expensive to establish and maintain.

The GmgV is intended to provide a dedicated statutory framework in which the asset lock forms part of the legal form itself.

2. Legislative status in 2026

On 4 March 2026, the German Federal Ministry of Justice and Consumer Protection and the Federal Ministry of Finance published a framework concept for a company with tied assets. The document sets out policy and legal parameters. It is not an enacted law, nor is it a model articles-of-association document that companies can currently use to incorporate a GmgV.

The following distinctions are important:

• The legal form is not currently available as a standard corporate form.
• The 2026 framework concept treats the GmgV as an independent legal form rather than merely a special type of GmbH.
• The precise rules on governance, distributions, exit, liquidation, audit and taxation may change during the legislative process.

3. Core features of the proposed GmgV

3.1 Permanent asset lock

The company’s assets would remain in the company and serve its purpose. Profits would generally be reinvested instead of distributed to members. The framework concept also aims to prevent indirect circumvention through economically unjustified remuneration, related-party transactions or non-market loans.

This would make the review of management remuneration, related-party transactions and internal financing particularly important. Companies would need transparent documentation showing that payments serve a legitimate business purpose and comply with the asset lock.

3.2 No private participation in the appreciation of value

The concept separates membership and economic ownership. Members would have participation and governance rights, but would not hold a conventional equity claim to the company’s accumulated value.

On exit, members would generally receive their paid-in funds without a return. A payment reflecting the increase in the company’s value would not be the intended model.

This has direct implications for founders, family succession, investors and management incentive schemes. A company must not choose the GmgV without first addressing how founders and other stakeholders will be compensated over the long term.

3.3 Asset lock on liquidation

After a liquidation, residual assets would not simply be distributed to members. They would be transferred to another organisation with a comparable asset lock or to another legally defined beneficiary.

The constitutional documents and governance system would therefore need to address the company’s purpose, successor organisations, decision-making authority and dispute resolution from the outset.

3.4 Irreversibility

The asset lock is intended to be permanent and not capable of being removed by a later amendment of the articles. This would distinguish the GmgV from a conventional GmbH whose shareholders may, within the limits of mandatory law, amend the articles and change the company’s strategy.

The choice of legal form would therefore be a long-term commitment rather than a temporary ownership arrangement.

3.5 Member-based organisation

The framework concept draws on the cooperative model. It refers in particular to a member assembly, a management body and a supervisory board, together with cooperative-style audit structures. Unlike a conventional cooperative, there would be no minimum number of members; the concept even contemplates a single member serving as the initial management body at formation.

The exact allocation of powers remains a matter for the future statute. Governance documents would need to deal with appointment, removal, conflicts of interest, information rights and oversight in considerable detail.

3.6 Audit and compliance

The framework concept contemplates audit through existing cooperative audit structures. The purpose would include reviewing compliance with the asset lock.

Businesses should expect an emphasis on:

• documentation of profits and reinvestment;
• review of remuneration and related-party dealings;
• reporting on the company’s purpose;
• governance and compliance controls;
• preparation for recurring audits.

3.7 Formation and capital requirements

The concept envisages a relatively simple formation process with limited capital requirements. This should not be confused with an absence of economic requirements: the company would still need adequate liquidity, a sound business plan, credible governance and the ability to operate within the asset lock.

3.8 Tax considerations

The framework concept contemplates corporate income tax and trade tax and aims to avoid unjustified tax advantages or disadvantages compared with conventional corporations. It also refers to a recurring substitute inheritance tax because membership interests would not pass through inheritance in the conventional manner.

The tax position must be assessed under the future statute and in the individual case, including any contribution of an existing business, succession planning, remuneration, financing and transfer taxes.

4. Practical implications

4.1 Succession planning

The GmgV may be attractive for family businesses that want to keep the enterprise intact over several generations. It could prevent the business from being fragmented or sold solely because of a change in ownership.

At the same time, family members would not receive valuable equity interests that can be sold or inherited in the ordinary way. Family provision, compensation and wealth planning would therefore require alternative solutions.

4.2 Sustainable and purpose-driven businesses

The GmgV may suit businesses whose identity depends on a stable purpose, reinvestment and long-term independence. Examples may include circular-economy businesses, sustainable manufacturers and companies whose founders expressly reject a short-term exit model.

A general reference to sustainability is not sufficient. The purpose should be defined precisely enough to guide management, members, supervisory bodies and auditors.

4.3 Financing and investors

Financing is likely to be one of the most difficult issues. Conventional equity investors usually expect distributions and participation in a future exit. Both expectations are limited by the GmgV model.

Depending on the future statute and the business model, companies may need to rely more heavily on retained profits, debt, grants, impact finance, strategic partnerships and carefully structured hybrid instruments. Each instrument must be tested against the asset lock and the prohibition of disguised distributions.

4.4 Governance and management oversight

If members do not benefit privately from an increase in value, the traditional incentive to monitor management changes. The governance system should therefore define:

• appointment and removal of management;
• supervisory board powers;
• conflicts of interest;
• approval requirements for extraordinary transactions;
• remuneration controls;
• reporting obligations;
• consequences of breaches of the asset lock.

The GmgV would not eliminate governance risk. It would shift the focus from distribution decisions to purpose, oversight, remuneration and long-term strategy.

4.5 Sale, exit and liquidation

A conventional private exit is difficult to reconcile with the core purpose of the GmgV. Before choosing this model, founders and members should address whether the business may need to be sold, reorganised or transferred to another purpose-bound organisation.

A GmgV should therefore not be chosen merely because it communicates sustainability. It should be chosen only if the stakeholders are willing to accept the long-term restrictions on private value realisation.

5. Who could benefit from the GmgV?

Potentially suitable cases include:

• purpose-driven start-ups that do not depend on venture capital;
• sustainable SMEs with a reinvestment strategy;
• family businesses seeking a long-term succession structure;
• companies built around a stable values-based mission;
• businesses with predictable cash flows and moderate external equity requirements.

The model may be less suitable for:

• founders planning a personal exit;
• businesses dependent on regular owner distributions;
• venture-capital or private-equity-backed companies;
• companies whose value is intended to fund the founders’ retirement;
• businesses requiring frequent changes in ownership or purpose.

6. Comparison with other structures

7. Preparation steps for businesses

Businesses can begin preparing without assuming that the GmgV will ultimately be enacted in its current form.

• Define whether the company’s purpose should prevail over private returns.
• Model the consequences of prohibiting distributions and value-based exit payments.
• Review succession, family provision and management incentives.
• Compare GmgV, GmbH, foundation, cooperative and holding structures.
• Test financing plans against a permanent asset lock.
• Design governance and conflict-of-interest controls.
• Review whether current contracts and articles contain long-term purpose or transfer provisions.
• Do not take irreversible restructuring steps solely on the basis of a discussion proposal.
• Check the legislative status again before the planned publication date and before any transaction.

Conclusion

The proposed Gesellschaft mit gebundenem Vermögen could create a new option for companies that want to combine entrepreneurial organisation with a permanent asset lock. Its potential value lies in safeguarding independence, purpose and long-term succession.

Its cost is equally clear: members would generally give up private participation in the company’s appreciation in value, and conventional equity financing could become more difficult. The GmgV should therefore be understood as a legal form for a particular ownership and governance philosophy, not as a universally superior alternative to the GmbH.

Are you considering a purpose-bound ownership model, a long-term succession structure or a sustainable corporate constitution? SMR Legal advises founders, management teams, shareholders and family businesses on legal form, governance, financing and succession planning, taking the applicable legislative and tax position into account.