Steward-ownership and ownership structures – New developments concerning the company with asset lock – Alternatives under current foundation and company law

Steward-ownership and ownership structures – New developments concerning the company with asset lock – Alternatives under current foundation and company law

Recently, the debate on steward-ownership and the company with asset lock (Gesellschaft mit gebundenem Vermögen – GmgV) has gained renewed momentum. According to information from the Federal Ministry of Justice and the Federal Ministry of Finance, a new legal form is currently under intensive review. The governing parties have declared their intention to introduce a company with asset lock as a new, independent legal form.

It is now being reported from ministerial circles that the fundamental concept of the academic draft for a company with assets lock may be adopted. It is therefore likely that a future legislative proposal will be based on, or at least closely aligned with, this draft.

The existing drafts have attracted significant attention in politics, business, society and academia, but have also triggered divided reactions. The respective positions emphasize different considerations. Family businesses, start-ups and founders, as well as social enterprises, are primarily mentioned as the target groups for a new legal form based on steward-ownership. Whether these groups actually desire or even require such a new legal form must be assessed on a case-by-case basis and remains to be seen.

Even today, the core principles of steward-ownership (independence and lock-in of asset) can already be implemented under existing legal forms of foundation and company law – in some cases with considerably greater flexibility and individually than commonly assumed.

In this context, this article provides an overview of (A.) the concept and key principles of steward-ownership, (B.) the target groups and arguments for a new legal form, (C.) the current status and recent developments, (D.) the basic structure of the academic draft for a company with asset lock, and (E.) the controversy surrounding the drafts to date.

Against this background, we outline (F.) the alternative ways of implementing steward-ownership structures using existing legal forms.

A. Concept and key principles of responsible ownership

The term steward-ownership describes a form of corporate ownership characterised by the legal entrenchment of two core principles: independence and lock-in of assets.

Independence in this sense refers to responsibility at the level of decision-making (decision-making responsibility): it is to be achieved by ensuring that voting rights, and thus control, always remain with those individuals who bear entrepreneurial responsibility, are connected to the company and uphold its values in the long term. Therefore, voting rights should neither be inheritable nor saleable, but should be linked to entry into and exit from the company. In the event of inheritance, the heirs should only be entitled to repayment of the capital contribution made.

The lock-in of assets means that the assets and profits of the company should, to the greatest extent possible, be reinvested in the company and its development or donated to charitable causes. Only limited withdrawals of profits and assets should be permitted: Founders may receive fair compensation, and investors may be entitled to a risk-adequate return. Beyond this, owners should not be entitled to profit distributions or liquidation proceeds. Accordingly, companies under steward-ownership are not seen as individual, personal assets, but as fiduciary property that the owners only hold as temporary trustees. Steward-ownership is to be understood as temporary responsibility for the assets (asset responsibility).

B. Target audience and arguments for a new legal form based on responsible ownership

The following target groups and arguments are primarily cited in favour of a legal form based on steward-ownership:

• Medium-sized family businesses and smaller companies (SMEs), for which succession within the family or non-family succession models, e.g. through sale, are not in sight or undesirable, but which nevertheless seek to ensure long-term independence and fiduciary continuation in line with their own corporate values; They should be enabled to establish a “family of values and skills” and thus find successors outside the family who will manage the company in a way that preserves its value for future generations.
• Start-ups and their founders who want to credibly promise that they are not pursuing a quick exit and that the company is not an object of speculation, but instead aim to build a medium-sized company with long-term economic prospects based on family business values, even without long-standing family traditions.
• Social enterprises that address societal challenges through their business model and seek to ensure, in a legally binding and reliable manner, that corporate profits primarily serve the company’s social mission, independently of the tax-law governing non-profit status.

C. Current status and latest developments

As of today (January 2026), a new legal form based on steward-ownership is currently being intensively examined, according to information from the Federal Ministry of Justice and Consumer Protection (BMJV) and the Federal Ministry of Finance (BMF). However, no formal legislative steps have yet been taken, and no concrete timetable is currently foreseeable.

The coalition agreement of 9 April 2025 between the CDU, CSU and SPD states: "We [...] want to introduce a new, independent legal form, the 'company with asset lock”. The characteristics of this legal form are the irrevocable asset lock and participation based on membership logic without tax privileges or discrimination."

This follows the so-called academic draft for a company with asset lock as an independent legal form presented in 2024. It is likely that any future legislative proposal will be based on, or at least closely aligned with, this draft. However, it remains uncertain when such a proposal might be introduced or whether it will be pursued within the current legislative term, amid the current global and multifaceted challenges.

In 2022, the Scientific Advisory Board (Wissenschaftlicher Beitrag) of the BMF had already opposed the concept of a limited liability company with asset lock, following a draft proposal in 2021.

Prior to this, the coalition agreement of 24 November 2021 between the SPD, Grüne and FDP had already announced the intention to create of a suitable legal framework for companies with asset lock. Even earlier, in 2020, an academic working group had presented an initial draft for a limited liability company based on steward-ownership

D. Basic structure of the 2024 draft for a company with asset lock

A look at the academic draft of 2024 is clearly justified, as it constituted the focal point of the most recent debate on steward-ownership and a future legislative proposal is likely to be based upon it.

The academic draft essentially proposed the company with asset lock as a new legal form based on steward-ownership, essentially as follows:

• The company with asset lock is intended to be a legal entity with a personalistic structure, not a limited company, but similar to a limited partnership, however without personally liable partners, but with limited liability partners, who may exclusively be natural persons or legal entities with comparable asset lock. Voting rights are, as a rule, to be allocated on a per-capita basis, although deviating provisions in the articles of association are to be possible.
• Formation as a single-shareholder entity should be permitted. The minimum contribution and liability amount should be EUR 5,000. Shares should not be transferable or inheritable, however shareholders may resign at any time by giving notice. If the company is dissolved or liquidated, the proceeds should go to another company with asset lock or to a charitable foundation. Conversion into a legal form without asset lock is to be excluded.
• Profits of the company with asset lock should not be distributed to shareholders, but must be used for the purpose of the company. Profits should thus remain a means to an end rather than the primary purpose of the company.
• The purpose, object and activity of the company with asset lock should in principle be freely selectable and changeable at any time. There should be no requirement to pursue charitable or sustainability-realted purposes. The intention to make a profit should be permissible insofar as profits serve the company’s own financing needs and are reinvested or donated.
• Market-based remuneration of (shareholder) managing directors should be permitted. Investors should also be allowed to participate in the company's profits, provided that these investors (i) are not shareholders, (ii) do not have rights similar to those of shareholders, and (iii) are not closely related to shareholders (cf. section 138 German Insolvency Code (InsO)). However, the direct provision for shareholders and their families should be excluded, as this would be contrary to the principle of asset lock.
• The asset lock is to be secured by a multi-level control system: (i) annual asset commitment report by the management, audited and published in the Commercial Register, (ii) event-based audits by a supervisory association, (iii) general whistleblower protection and whistleblower system, (iv) possibility of excluding shareholders in the event of a breach of the asset commitment , and (v) management liability for prohibited distributions.
• The corporate governance of the company with asset lock should follow the familiar basic structure of a limited liability company (GmbH) with management and a shareholders' meeting: management and representation by a management board consisting of one or more shareholders or external managing directors; the shareholders' meeting has the right to issue instructions to the management board; important decisions always remain with the shareholders' meeting. Additional bodies (e.g. advisory boards) should be optional. A supervisory board should only be mandatory in accordance with the general co-determination rules.
• No tax privileges are planned.

E. Controversy over the drafts for a new legal form of responsible ownership

All previous drafts for a new legal form of steward-ownership have met with considerable response in politics and business, society and academia, and have been discussed controversially.

Proponents naturally emphasise, in particular, the need for a new legal form of steward- ownership and its potential benefits for family businesses, start-ups and social enterprises, for business succession, for decentralised and pluralistic ownership structures, for a more sustainable economy and a more socially oriented society, legal certainty combined with flexibility, lower costs and complexity compared to steward-ownership structures based on existing legal forms, equal tax treatment in relation to other corporate forms, and the prevention of tax-avoidance models.

Critics primarily regard the core element of asset lock to be vulnerable: it could be circumvented by salary payments, especially since it is difficult to verify their appropriateness. In addition, external investors could exert influence on the company and participate in its profits, e.g. through atypical silent partnerships; this risk is further exacerbated by the asset lock itself, which renders equity financing and equity returns, and, conversely, increases both the necessity and likelihood of external financing. It is therefore questionable whether the proposed control system is capable of preventing these risks. Shareholders who are not financially motivated are likely to exhibit a lower incentive to exercise effective oversight over the management. The reference to sustainability is regarded as rather rhetorical, since the corporate purpose does not have to be charitable or ESG-oriented and can also be changed at any time.

Both positions have pros and cons – from a legal and systematic point of view, the most challenging aspect is probably the attempt to combine an immutable asset lock with membership-based participation in a single legal form. This is difficult to reconcile.

F. Responsible ownership structures with existing legal forms as an alternative

Even today, the core principles of steward-ownership (independence and asset lock) can be implemented using legal forms under current foundation and company law.

For example, assets of any kind, as well as companies, can be placed in an independent legal structure through a legally capable civil-law foundation and bound to a specific purpose.

In terms of assets, the foundation offers a broad spectrum of asset-lock arrangements and degrees of intensity (locking intensity): depending on how many shares in the company are transferred to the foundation, how these shares are structured at company level, how they are transferred to the foundation and how the foundation is intended to deal with the company or the shareholding, the asset lock can be tailored to suit individual requirements. There is significantly greater flexibility than is commonly assumed.

Flexibility can also be created in the foundation in terms of purpose and organisation. It is true that the statutes of a foundation, in particular the purpose to which the foundation's assets are dedicated, cannot be changed as easily as in the case of a GmbH or as desired for the company with asset lock. However, by carefully drafting the foundation's statutes from the outset, the statutory and generally rigid three-tier system for amending the statutes can be made considerably more flexible, both in terms of the purpose and the organisation of the foundation (foundation governance).

Furthermore, decision-making competences can also be allocated at the foundation level: e.g. responsibility for the exercise of voting rights in the company may be separated from responsibility for the use of profits (use of funds). Such competences may be assigned to different foundation bodies, distributed across multiple foundations and/or companies, as in the so-called dual-foundation and combination models, or even organised within multi-tier governance structures.

Depending on the purpose to which the company's assets are to be dedicated, charitable foundations, family foundations or private-benefit foundations (i.e. non-charitable foundations that are not family foundations) can be used. Naturally, each option entails specific tax and foundation-supervisory considerations that must be taken into account.

Below the foundation, corporate law arrangements can be made at the level of the company or enterprise, whereby recourse to a GmbH is particularly suitable as its articles of association may be structured to a large extend at the discretion of the shareholders' meeting. In this way, principles of steward-ownership can also be embedded within a GmbH, although it is not possible to establish them as permanently binding under GmbH law alone. One possible approach to preventing shareholder resolutions that violate steward-ownership principles is to grant special voting rights in the form of so-called veto shares or "golden shares". Such shares carrying special voting rights may be allocated, directly or indirectly, to a shareholder particularly suited to safeguard the stability of the steward-ownership structure, whether a natural person, another steward-ownership company or a steward-ownership foundation.

G. Conclusion and outlook

The idea of steward-ownership is not new. In fact, it predates the initiative for a new legal form. This is particularly well understood by family entrepreneurs, who see themselves as trustees of the company's assets and bear this responsibility along with the assets, passing it on from one generation to the next.

Whether the advantage described for start-ups and founders will materialise in practice is also exciting from a financing perspective: owing to the asset lock, the legal form is likely to be of limited attractiveness to equity investors, potentially leaving debt financing as the only alternative, which, given the often limited equity base of such enterprises, would then have to be obtained at comparatively high interest rates.

Nevertheless, the idea of introducing a new legal form based on steward-ownership is innovative and deserves respect as it prompts reflection on responsible ownership and proprietorship structures. However, it remains to be seen whether a new legal form will emerge and, if so, what character it will take. The most recent academic draft of 2024 for a company with asset lock still marks some distance from legislative implementation. However, new structuring options may emerge in the future.

In any case, steward-ownership structures can already be implemented today using legal forms under current foundation and company law – in particular for the structuring of business succession and other assets – in a far more flexible and individual manner than is commonly assumed. Please feel free to contact us for further information.

See also our article Proposal for a "GmbH in steward-ownership" as a new legal form variant.