Ongoing legal uncertainty regarding the registrability of the term "partners" for a limited liability company

The Higher Regional Court of Hamburg (OLG Hamburg) recently decided that the term "partners" was registrable as part of the company name of a German limited liability company (GmbH). Due to the mandatory addition of the legal form "GmbH" to the company name and the obviously erroneous plural formation - according to German language comprehension, where the plural would also be “Partner” - it does not create a risk of confusion with  a partnership company according to the Partnership Companies Act (PartGG), which is only open to members of certain professional groups, such as lawyers, tax consultants, architects or engineers.

Background

The GmbH concerned applied for the entry of "x. partners Steuerberatungsgesellschaft mbH" ("x. partners tax consulting GmbH") in the commercial register. The register court rejected the application for registration due to violation of section 11 para. 1 sentence 1 PartGG. According to this, the company addition "Partner" may only be used by partnership companies. The use of the term "partners", according to the register court, is equivalent to this. The GmbH appealed against this decision.

The decision of the OLG Hamburg of May 10, 2019, file no. 11 W 35/19

The complaint was successful. The OLG Hamburg did not see any violation of section 11 para. 1 sentence 1 PartGG. Especially because of the obviously incorrect pluralism and lower case for the German word "Partner", the word "partners" already clearly distinguished itself linguistically. Any confusion with a partnership company was ruled out anyway in the case of a GmbH due to the addition of the word "GmbH" to the company name, which is mandatory pursuant to section 4 sentence 1 German Act on Limited Liability Companies.

Furthermore, the OLG Hamburg could not identify any recognizable intentions of the legislator to extend the protective effect of section 11 para. 1 sentence 1 PartGG to English-language company supplements. Rather, in principle, any company name is registrable which has sufficient distinctiveness and designation effect, which also reveals the corporate relationship and at the same time discloses the liability relationships.

Note

With its decision, the OLG Hamburg clearly deviates from the other decisions of the German higher courts and from the case-law of the German Federal Supreme Court (BGH). A possible legal complaint to the BGH to ensure uniform jurisdiction has not been permitted by the OLG Hamburg. A clarification is therefore not foreseeable.

The BGH justifies its strict rejection of additions of this kind - apart from the protection against confusion - above all with a comprehensive reservation of the addition "Partner" for partnerships according to section 11 para. 1 sentence 1 PartGG. Irrespective of this, it is questionable whether confusion can actually be ruled out from the point of view of the relevant public. Even if "partners" can be clearly distinguished visually according to the understanding of the German language, other elements such as sound and typeface are also characteristic. There is probably also no serious interest on the part of a company in using an ambiguous company name.

Therefore, caution is still required when using terms in company components that are similar to the name additions "Partnerschaft" (engl. “partnership”) or "und Partner” (engl. “and partners"). It can be assumed that the registry courts are predominantly opposed to a possible application for registration.