§ 14 Entrepreneur: The German Civil Code (BGB) is the central body of German civil law and regulates the relationship between natural persons, legal entities and the state.
One of the important paragraphs in the BGB is § 14, which deals with the definition of an entrepreneur. In this blog post, I will give you a comprehensive overview of Section 14 Entrepreneur in the BGB and explain what it means to be an entrepreneur under this law.
Table of contents:
- Definition of entrepreneur according to § 14 BGB
- Natural persons as entrepreneurs
- Legal persons as entrepreneurs
- Business as a prerequisite for being an entrepreneur
- Distinction between entrepreneur and consumer
- Special rules for contracts with consumers
- Consumer protection as an important aspect of the BGB
- Liability of entrepreneurs
- Conclusion: Legal advice on the subject of § 14 Entrepreneurs
Definition of entrepreneur under § 14 BGB
Natural persons can be considered entrepreneurs according to § 14 BGB if they exercise a commercial or independent professional activity. This activity must be of a permanent nature and aimed at making a profit. The term “commercial enterprise” is not precisely defined in law, but it can be said that it is a long-term activity that is aimed at making a profit.
An important aspect in the classification as an entrepreneur is whether the activity is carried out as a main or secondary occupation. This is because even a sideline activity can be classified as a business if it is permanent and aims to make a profit. It does not matter whether the profit made is small or the activity is only carried out temporarily.
An example of a natural person who is considered an entrepreneur within the meaning of Section 14 of the Civil Code would be a freelance lawyer who works as a sole proprietor and thus engages in self-employed professional activity. A craftsman who runs a business and offers his services for remuneration is also considered an entrepreneur.
In summary, a natural person is considered to be an entrepreneur within the meaning of Section 14 of the Civil Code if he or she carries out a commercial or self-employed professional activity on a permanent basis and with the intention of making a profit. It does not matter whether the activity is carried out as a main or secondary occupation. An important aspect for entrepreneurs is compliance with the legal requirements in the BGB, especially in the area of consumer protection.
§ Section 14 Entrepreneurs: Natural persons as entrepreneurs
Natural persons can be regarded as entrepreneurs under section 14 of the BGB if they pursue a commercial or self-employed professional activity. It is irrelevant whether the activity is carried out as a main or secondary occupation. Below are some examples of activities that characterise a natural person as an entrepreneur within the meaning of the BGB:
- Self-employment as a freelancer, e.g. as a lawyer, tax consultant or architect
- Operating a craft business, e.g. an installation or repair service
- Setting up a retail business, e.g. a shop for sportswear or electronic goods
- Running a catering business, e.g. a restaurant or café
- Running a commercial or service business, e.g. an online shop or a travel agency
As already mentioned, an activity that is intended to be permanent and aimed at making a profit is a necessary condition for entrepreneurship within the meaning of section 14 of the Civil Code. One-off or occasional activities do not usually fall under the definition of a commercial enterprise and thus do not lead to entrepreneurial status. However, it always depends on the individual case and in case of doubt it may be advisable to consult a lawyer to clarify the entrepreneurial status.
As entrepreneurs within the meaning of § 14 BGB, natural persons are subject to various legal obligations and regulations. These include, in particular, compliance with consumer protection regulations, the preparation of general terms and conditions (GTC) and the keeping of proper accounts.
Legal persons as entrepreneurs
Legal persons can also be regarded as entrepreneurs under § 14 of the German Civil Code (BGB) if they act in the exercise of their commercial or self-employed professional activity. Legal persons are organisations with legal capacity which participate in legal transactions as a separate legal entity and can therefore themselves be bearers of rights and obligations. Legal persons include in particular the GmbH, the AG and the cooperative.
An example of a legal person as an entrepreneur would be a GmbH, which concludes a legal transaction as a limited liability company. This is a company whose liability is limited to the company’s assets and whose shareholders are usually not personally liable. A public limited company (AG) can also be considered an entrepreneur within the meaning of section 14 BGB if it acts in the exercise of its commercial or independent professional activity.
§ Section 14 Entrepreneur: As legal persons, GmbHs and AGs are subject to various legal regulations and obligations, especially in the area of company law and commercial law. For example, managing directors or board members must ensure that the company fulfils all legal requirements and is able to meet its liabilities. Here too, in case of doubt, it may be advisable to consult a lawyer to ensure compliance with the legal requirements.
Business operation as a prerequisite for entrepreneurial status
A necessary prerequisite for entrepreneurship within the meaning of § 14 BGB is the exercise of a commercial or self-employed professional activity. This is a long-term activity which is geared towards the intention of making a profit. A commercial enterprise within the meaning of the BGB is not precisely defined, but there are some indications that can be used to distinguish a commercial activity from a non-commercial one. In the following you will find some examples of activities that are considered to be commercial operations:
- Running a commercial business, e.g. a supermarket or a DIY store
- Running a service business, e.g. a hairdressing salon or an advertising agency
- Establishment of a production facility, e.g. a factory for the manufacture of machinery or foodstuffs
- Practising a craft, e.g. a carpenter or plumber
- Working as a freelancer, e.g. as a lawyer or tax consultant
However, it always depends on the individual case whether an activity is to be regarded as a trade or business within the meaning of § 14 BGB. For example, a one-time sale of self-made goods at a flea market is not a commercial activity, whereas the regular sale of self-made goods via an online shop or at markets may be considered a commercial enterprise.
In order to classify an activity as a commercial enterprise, it is also relevant whether the activity is intended to be permanent and aimed at making a profit. An activity that is only carried out temporarily or is only aimed at covering costs is generally not to be considered a commercial enterprise.
As entrepreneurs within the meaning of Section 14 of the German Civil Code (BGB), tradespeople are subject to various legal regulations, especially in the area of commercial law and tax law. For example, all tradespeople must register a trade and are obliged to keep proper accounts. In addition, special regulations apply to traders in the area of consumer protection.
Distinction between entrepreneurs and consumers
The BGB distinguishes between entrepreneurs and consumers. According to § 14 BGB, an entrepreneur is someone who carries out a commercial or self-employed professional activity. In contrast, a consumer is a person who, when concluding a legal transaction, is not acting in the exercise of his or her commercial or self-employed professional activity.
This distinction is so important because special regulations in the BGB apply to contracts between entrepreneurs and consumers. Special protective regulations apply to contracts with consumers in the BGB, which are intended to ensure a higher level of consumer protection.
An example of a consumer is a private customer who buys a television in a shop. In this case, the customer is not acting in the exercise of his or her commercial or independent professional activity, but as a private end consumer. In contrast, an entrepreneur is, for example, an electrical retailer who sells televisions to final consumers. In this case, the electrical retailer acts in the exercise of his commercial activity and is thus considered an entrepreneur.
§ Section 14 Entrepreneur: Special rules for contracts with consumers
The distinction between entrepreneurs and consumers is also important because special rules apply to contracts between consumers and entrepreneurs. For example, general terms and conditions for contracts with consumers must be formulated clearly and understandably in order to be effective.
Furthermore, clauses in general terms and conditions are invalid if they unreasonably disadvantage the consumer. Consumers can also make use of their right of withdrawal if they conclude a contract with a trader online or off-premises, for example. In addition, a consumer can assert warranty rights in the event of defects in the purchased goods and, if necessary, claim damages.
On the other hand, different rules apply to entrepreneurs, as they are usually more experienced contractual partners and are also in a position to seek professional advice if necessary. For example, other regulations apply in the area of the limitation of claims or in the warranty of goods.
It is therefore important that entrepreneurs and consumers know and observe the respective special features and regulations in the BGB when concluding contracts. In this way, problems and disputes can be avoided and an amicable solution found.
Consumer protection as an important aspect of the BGB
Consumer protection is an important aspect in the BGB and is taken into account in numerous rules and regulations. The aim of consumer protection is to protect the consumer from possible disadvantages and risks in connection with contracts and trade.
A central component of consumer protection in the BGB is the right of withdrawal. Consumers have the right to revoke contracts within a certain period in many cases. The right of withdrawal applies, for example, to contracts concluded online or off-premises. In this case, the consumer does not have to give any reasons for the revocation and gets his money back.
Another important aspect of consumer protection in the BGB is protection against unreasonable contract clauses. General terms and conditions (GTC) of businesses must meet certain requirements and must not unreasonably disadvantage the consumer. For example, clauses in GTCs that release the consumer from essential rights and obligations or impose unreasonable disadvantages on the consumer are invalid.
Furthermore, there are regulations in the BGB to protect against unfair business practices. For example, misleading advertising or aggressive sales methods are prohibited. Violations of competition law can also be punished within the framework of consumer protection.
In the area of consumer protection, there are many other rules and regulations in the BGB that are intended to protect consumers from unfair practices in trade. It is therefore important for businesses that conclude contracts with consumers to know and observe these regulations in the BGB. This is the only way to ensure adequate consumer protection.
Liability of Entrepreneurs
§ 14 Entrepreneurs: The liability of entrepreneurs is regulated in various provisions in the BGB. One important provision is § 276 of the BGB, according to which the entrepreneur is generally liable for his contractual obligations. This also includes the obligation to provide an agreed service or to rectify a defective service.
Another important aspect of the liability of entrepreneurs is product liability. Product liability is regulated in the Product Liability Act (ProdHaftG) and governs the liability of manufacturers and traders for damage caused by defective products. According to § 1 ProdHaftG, manufacturers and traders are liable for damages caused by a defective product, regardless of fault.
Another important provision regarding the liability of entrepreneurs is § 823 BGB. This provision regulates liability for damage caused by a tortious act. This can be a breach of contractual duties or a breach of duty in the context of another legal relationship. In this case, the entrepreneur is liable for the damage incurred.
Entrepreneurs can take various measures to avoid liability risks, such as using contractual limitations of liability or hedging against product liability risks. However, it is important that entrepreneurs seek expert advice in advance and carefully weigh up all liability risks.
Overall, the liability of entrepreneurs is a complex issue arising from various legal rules and regulations. It is therefore important that entrepreneurs inform themselves about the relevant regulations and measures to avoid liability and seek expert advice if necessary.
Conclusion and legal advice on § 14 Entrepreneurs
In summary, the BGB contains numerous provisions and regulations that are of central importance to entrepreneurs. In particular, the definition of entrepreneurial status under section 14 of the BGB and consumer protection play an important role here. The liability of entrepreneurs and product liability are also central aspects that should be carefully observed by entrepreneurs.
Since there are numerous rules and regulations in the BGB that can be interpreted differently in individual cases, it is advisable for entrepreneurs to seek expert legal advice if necessary. Especially in the case of complex legal issues, such as the liability of entrepreneurs, expert advice from a lawyer can help minimise risks and avoid legal conflicts.
“As a law firm, it is our concern to provide our clients with comprehensive advice and support on legal issues. The German Civil Code contains numerous rules and regulations that are of central importance for entrepreneurs. Our lawyers will be happy to assist you with their knowledge and many years of experience and support you in asserting your rights. Feel free to contact us for individual legal advice.”
Overall, it can be stated that Section 14 of the German Civil Code (BGB) plays a central role in German civil law and precisely defines the status of an entrepreneur. When concluding legal transactions, entrepreneurs must ensure that they take into account the special features of consumer protection in the BGB in order to conclude legally secure contracts. A careful examination of GTCs and compliance with the legal requirements are essential in this respect.