The Silent Partnership Agreement (stille Beteiligung): Form, Clauses and Pitfalls

An agreement establishing a stille Beteiligung (a silent partnership under German and Austrian law) is in principle free of any form requirement. Three exceptions break that rule — the German AG under § 294 Abs 2 AktG, option rights over GmbH shares, and an interest that is gifted rather than paid in — and the valuation, due date and interest on the Auseinandersetzungsguthaben (the settlement credit payable on exit) must be agreed contractually, because §§ 235 HGB and 186 UGB say nothing about any of them.

For owners running an actual process, our approach to selling your company sets out how the mandate works.

Freedom of form sounds like a relief. In practice it is the reason the signed document becomes the only basis there is. No notary reviews it, and no register records it.

What follows: the form requirements in Austria and Germany, the two traps that MoPeG has planted in older German agreements since 01.01.2024, and the findings from a review of widely used templates. The fundamentals of the instrument are covered under silent partnership.

Freedom of form is the rule — with three exceptions

In the standard case a silent partnership comes into being through informal agreement. Neither for a GmbH nor for a sole trader is there any entry in the Firmenbuch (the Austrian companies register) or the Handelsregister (the German commercial register). An oral agreement would be valid, if practically useless.

Three constellations overturn that rule. They are rarely checked in template agreements, because they do not come from the law of silent partnership itself but reach in from outside.

Constellation	Austria	Germany
GmbH, sole trader	form-free, no Firmenbuch entry	form-free, no Handelsregister entry
Silent partnership in an AG	no reliable finding available here, check separately	§ 294 Abs 2 AktG: registration in the Handelsregister is constitutive, without it the agreement is ineffective
Call, put or conversion right over a GmbH share	§ 76 Abs 2 S 2 GmbHG: Notariatsakt (an Austrian notarial deed)	§ 15 Abs 4 GmbHG: notarial form
The contribution is gifted	§ 1 Abs 1 lit d NotAktsG: Notariatsakt, no cure available	§ 518 Abs 1 BGB, cure under Abs 2

The option trap reaches further than most people assume. Where a call, put or conversion right over a GmbH share is agreed, the form requirement captures the entire agreement. Convertibility is popular in growth financings — and turns a form-free agreement into a notarial matter.

One detail regularly gets muddled in Austrian drafts: § 49 Abs 1 GmbHG requires notarielle Beurkundung (notarial recording), not a Notariatsakt. The Notariatsakt is in § 76 Abs 2 GmbHG. Confusing the two means choosing either too weak or an unnecessarily expensive form.

The gift trap: § 518 BGB cures, § 1 NotAktsG does not

Family arrangements are the most common use case for silent partnerships — and also the one where the Austrian-German difference bites hardest. If the contribution is gifted rather than paid in, the applicable legal system decides between validity and nullity.

In Germany § 518 Abs 1 BGB applies: a promise to make a gift requires notarial recording. If that is missing, § 518 Abs 2 BGB cures the defect once the promised performance is rendered. Actually booking in the contribution therefore repairs the formal defect after the event.

Austria has no such lifeline. § 1 Abs 1 lit d NotAktsG covers "Schenkungsverträge ohne wirkliche Uebergabe", gift agreements without actual handover, and requires a Notariatsakt. Without one the agreement is void, and the provision contains no cure.

In practice that means: anyone in Austria gifting a child a silent partnership interest and merely booking the contribution against an intercompany account risks the entire agreement being void. The question bears directly on admitting a silent partner within a family.

Two MoPeG traps in older German agreements

MoPeG (the German act modernising partnership law) has applied since 01.01.2024. It changed two provisions on silent partnership that are cited in almost every template. Agreements drafted before that date therefore refer to rules that no longer exist in that form.

First trap: since MoPeG (Art. 51 Nr. 19), § 233 HGB consists of a single sentence. It says that § 166 HGB applies accordingly to the silent partner's information rights. The court order procedure of § 233 Abs 3 HGB in its old version has disappeared from the statutory text. Agreements referring to "§ 233 Abs 3 HGB" point at nothing. Austria has kept that procedure in § 183 Abs 3 UGB.

Second trap: § 234 HGB used to refer to §§ 132, 134 and 135 HGB. Through MoPeG Art. 51 Nr. 20 it now refers to §§ 132 and 133 HGB. § 132 HGB has been recast in full and runs to six subsections. The old §§ 134 and 135 have dropped out of the chain.

Point	Germany since 01.01.2024	Austria
Silent partner's information right	§ 233 HGB, one sentence, referring to § 166 HGB	§ 183 UGB
Court order procedure	removed from the statutory text	retained in § 183 Abs 3 UGB
Termination chain	§ 234 HGB refers to §§ 132 and 133 HGB	§ 184 UGB refers to §§ 132 and 134 UGB
Basis of the change	MoPeG Art. 51 Nr. 19 and Nr. 20	unchanged in this respect

The chains are not identical. Anyone drafting a cross-border agreement has to cite the German and the Austrian references separately. A single combined bracket reading "§§ 234 HGB, 184 UGB" has been factually wrong since 2024.

MoPeG has not devalued the case law on how to classify the arrangement. § 705 Abs 1 BGB in its MoPeG version continues to carry the distinction between a partnership relationship and a mere exchange contract.

What ten reviewed standard templates do not contain

This is the actual finding. Ten widely used template agreements were examined against five points that regularly decide disputes. The result is the same in all five.

Not one of the ten templates provided for monthly reporting. The statutory fallback is the annual accounts — anyone who wants to be informed during the year has to write it in.

Not one template contained a non-compete obligation on the silent partner. A silent partner gains insight into figures, margins and customer structure, and is then free to finance a competitor without any contractual restraint.

Not one template contained a genuine change-of-control clause. If the company is sold, the silent interest sits there unregulated. Negotiation then happens under the time pressure of a live sale process.

Not one template provided for a valuation under IDW S 1. And conversely, not one template contained a pure book-value settlement as the sole rule. The settlement clause is therefore left open in both directions — neither anchored methodically nor deliberately capped.

These five negative findings share one cause. Templates reproduce what the statute prescribes. Disputes are about what it does not.

What the statute does not regulate

§ 235 HGB and § 186 UGB order the settlement of the interest. But they contain no valuation rule, no due date rule and no interest rule. Those three gaps are the commercially most expensive part of the agreement.

Without a contractual rule, the settlement credit falls due immediately and carries no interest. For the company that means a cash outflow with no run-up if notice is given. For the silent partner it means that any dispute over the amount runs interest-free at their expense. How the credit is calculated is covered under settlement credit.

Profit participation, by contrast, is mandatory. § 231 Abs 2 HGB and § 181 Abs 2 UGB make only participation in losses capable of being excluded, not participation in profits. An agreement promising the silent partner a pure fixed coupon with no link to results is therefore structurally suspect — more on that below.

One Austrian provision has no German counterpart: § 188 UGB. It contains a special one-year avoidance period for the repayment of the contribution or the waiver of the loss share before insolvency proceedings are opened. Anyone unwinding a silent partnership in a crisis should know that period.

One question of real practical importance in Austria remains open: whether a silent partnership with a fixed coupon and a repayment promise can amount to deposit business requiring a licence under § 1 Abs 1 Z 1 BWG (the Austrian Banking Act). No reliable clarification is apparent. Equally unresolved is whether admitting a silent partner to an Austrian GmbH requires a shareholders' resolution.

Silent partnership or participating loan

The distinction determines the category of income, the balance sheet treatment and the control rights. The BFH put it in headnote 1 of its judgment of 28.11.2019 – IV R 54/16: "Einem partiarischen Darlehen sind – in Abgrenzung von einer stillen Beteiligung – eine Verlustbeteiligung des Darlehensgebers und eine gemeinsame Zweckverfolgung (§ 705 BGB) fremd." — a partiarisches Darlehen (a participating loan), as distinct from a silent partnership, does not involve the lender sharing in losses or pursuing a common purpose.

The second half of that statement is what matters. Under this decision the label chosen by the parties is "nicht maßgebend", not decisive. A heading reading "agreement on a silent partnership" therefore offers no protection if loss participation and common purpose are absent. Conversely, an agreement labelled as a loan may in fact be a silent partnership.

The BGH addressed the classification of such capital provisions in its judgment of 10.10.1994 – II ZR 32/94 (BGHZ 127, 176). The leading decision on the defective silent partnership is BGH, judgment of 16.07.2019 – II ZR 175/18 (BGHZ 223, 13).

For Austria a clear negative finding has to be recorded: no OGH decision on the distinction between a silent partnership and a participating loan can be verified. The RIS legal database blocks automated research, and the relevant literature works at this point exclusively with citations to other literature. Anyone relying on settled case law in an Austrian agreement should check those citations one by one.

From this follows a simple drafting rule. If a silent partnership is intended, loss participation and common purpose belong expressly in the text. If a loan is intended, both belong expressly out of it. The alternatives are placed in context under mezzanine capital; related instruments are the subordinated loan and profit participation rights.

Clause checklist: statutory fallback against agreed rule

The following overview sets out, for each subject matter, what applies without a contractual clause and what needs to be agreed.

Subject matter	Statutory fallback	What needs to be agreed
Valuation of the settlement credit	none (§ 235 HGB, § 186 UGB are silent)	method, valuation date, who values, expert determination
Due date of the credit	immediately due	payment in instalments, deferral, annual cap
Interest on the credit	no interest	rate from valuation date to payment
Profit participation	mandatory, cannot be excluded (§ 231 Abs 2 HGB, § 181 Abs 2 UGB)	basis of calculation, share, cap
Loss participation	can be excluded	whether at all, upper limit, treatment of loss carryforwards
Information right (DE)	§ 233 HGB, referring to § 166 HGB	reporting cycle, scope, delivery deadline
Information right (AT)	§ 183 UGB, court order under Abs 3	additional reporting duties, audit rights
Termination (DE)	§ 234 HGB, referring to §§ 132, 133 HGB	minimum term, ordinary notice period, good cause
Termination (AT)	§ 184 UGB, referring to §§ 132, 134 UGB	minimum term, ordinary notice period, good cause
Change of control	none	consent, tag-along, settlement consequence on exit
Non-compete on the silent partner	none	scope by subject matter, territory and time
Subordination	none	express subordination undertaking
Option over shares	none	mind the form requirement (§ 15 Abs 4 GmbHG, § 76 Abs 2 GmbHG)

One tax point should be considered at the drafting stage. § 32d Abs 2 Nr 1 EStG removes the German flat-rate withholding regime precisely in the family constellation that is so often promoted: for related parties (lit a) and for a shareholder holding at least 10 per cent or a person close to them (lit b), the personal tax rate applies. Sentence 2 adds: "Insoweit findet § 20 Absatz 6 und 9 keine Anwendung" — to that extent the saver's allowance and the loss offset rules fall away too. The full picture is set out under tax treatment of the silent partnership.

Common mistakes

The agreement is classified by its heading. The line between a typical and an atypical silent partnership runs along the actual terms, not the title of the document. Anyone agreeing participation in hidden reserves and a catalogue of consent rights has an atypical silent partnership — regardless of what page one says.

Outdated references are carried over. A template from 2022 cites § 233 Abs 3 HGB and §§ 134, 135 HGB. Both references have pointed at nothing since MoPeG. Every template drafted before 2024 needs checking at these points.

The settlement clause is reduced to "at fair value". Without a method, a valuation date and a mechanism for appointing an expert, that is a clause designed to produce litigation. Which methods come into question is shown under company valuation.

Incorrect citations are copied without checking. Guidance literature circulates combinations such as "BGH II ZR 170/87 (Supermarkt)" which do not exist in that form. II ZR 170/87 of 14.12.1987 (BGHZ 103, 1) concerns void control and profit transfer agreements. The "Supermarkt" decision is BGH, order of 24.10.1988 – II ZB 7/88 (BGHZ 105, 324). Anyone carrying such citations into an agreement or a pleading loses credibility in a dispute.

The form question is asked too late. Option rights and gift elements often only appear in the second round of negotiations. By then the draft is settled, and nobody rechecks the form.

The interest is drafted without a view to the eventual exit. Whether a silent partner is sold along, settled or taken over is decided in the change-of-control clause. How an existing position is unwound is covered under selling a shareholding.

This article is not a substitute for legal or tax advice.

How IGCP helps

International German Capital Partners (IGCP) has been advising on participation and capital raising processes for more than 20 years, with over 100 transactions completed and complete independence from banks, funds and the buy side. With a silent partnership agreement, our contribution comes before the legal drafting.

The commercial terms are settled first: the basis of calculation for profit participation, the cap on loss participation, subordination, term, information rights and above all the settlement mechanics. Only once those points are decided is a draft worth preparing. Legal and tax implementation is done with your own lawyers and tax advisers.

The typical range is companies with revenue between 300,000 and 15 million euros, with a focus on niche businesses and scalable business models in the DACH region. IGCP processes usually run three to six months instead of the market-standard six to twelve. Recent references include the sale of net-haus GmbH to SINGU (Poland) in 2025, Gate to the Games to the SIMBA-DICKIE-GROUP in 2023 and Wohnungsboerse.net (PWIB) to Scout24 in 2021.

If a draft is already on your desk, send it confidentially to office@igcp.at and we will go through the points that later get litigated — valuation, due date, change of control.

If the interest later leads to a full exit, the rules under selling a GmbH apply. Which rights and obligations the investment agreement itself governs is covered under the shareholders agreement when an investor joins.

FAQ

Does a silent partnership agreement need a particular form?

In principle no. For a GmbH and a sole trader the silent partnership arises free of form, and there is no entry in the Firmenbuch or the Handelsregister. The exceptions are the German AG under § 294 Abs 2 AktG, option rights over GmbH shares, and a contribution that is gifted.

Why is a gifted contribution riskier in Austria than in Germany?

In Germany § 518 Abs 1 BGB requires notarial recording, but § 518 Abs 2 BGB cures the defect once the performance is rendered. In Austria § 1 Abs 1 lit d NotAktsG requires a Notariatsakt for gift agreements without actual handover, and there is no cure. The agreement stays void.

What did MoPeG change in the law of silent partnership?

Two things. Since MoPeG, § 233 HGB consists of a single sentence referring to § 166 HGB; the court order procedure of the former Abs 3 has gone. § 234 HGB now refers to §§ 132 and 133 HGB instead of §§ 132, 134 and 135 HGB.

Is an agreement that refers to § 233 Abs 3 HGB still valid?

The reference points at nothing, because the provision no longer exists in that form. The agreement itself remains effective, but the intended legal consequence does not arise. Such clauses should be replaced by a free-standing contractual rule on information rights.

What happens if the agreement is silent on the settlement credit?

The credit then falls due immediately and carries no interest. § 235 HGB and § 186 UGB contain no valuation rule, no due date rule and no interest rule. For the company that means a cash outflow with no run-up; for the silent partner, a dispute that runs interest-free.

How do I distinguish a silent partnership from a participating loan?

Under BFH of 28.11.2019 – IV R 54/16, a participating loan does not involve the lender sharing in losses or pursuing a common purpose under § 705 BGB. The label chosen by the parties is not decisive. Anyone who wants a silent partnership writes both features expressly into the agreement.

Can profit participation be excluded by agreement?

No. § 231 Abs 2 HGB and § 181 Abs 2 UGB make only participation in losses capable of exclusion. An arrangement promising the silent partner nothing but a fixed coupon points away from a silent partnership and towards a loan.