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What is a legal entity in contracts? Simply explained

  • Oct 29, 2025
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The legal Person is a term used in German law. An easy-to-understand explanation of what is behind this terminology, see this article.

Legal Person as a term of the German Right

  • The term "legal Person" is meant in the German law, no individual Person. It is referred to as either an asset or a collection.
  • Relevant is the legal Person, for example, if you are a club or a Foundation to establish. Here, legal capacity must be created. This means that the Association can file a lawsuit in court or sued.
  • In the case of an Association or a Foundation, this would be without the instance of the legal Person, hardly possible: Thus, no member can submit on behalf of the entire Association, an action or a representative of the Association be sued.
  • There would be no legal capacity and therefore no legal certainty. Therefore, the entire Association or the Foundation is considered to be in front of the set as a legal Person that is responsible and, if necessary, to account for can be drawn.
  • In addition, the legal Person is divided in accordance with the public law and private law.
Term is important in contract law (image: Pixabay)

Legal Person in Private and in public law

  • In private law, the legal capacity in the Form of a legal entity is achieved by registration in a Register, in the register of associations.
  • In the case of a Foundation, the state granted a concession, in order to create a legal entity.
  • However, certain business forms of private law as legal persons. These include, for example, the eingetragene Genossenschaft (e. G.), the Corporation or the GmbH.
  • A legal Person of public Law is enforced by the law in force. The subject foundations of public Law, corporations and institutions.
What is the punishment according to the penal code for failure to assist a person threatens, you will learn in the next article.

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