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Creating a New Legal Form: The GmbH

Published online by Cambridge University Press:  16 March 2021

Timothy W. Guinnane
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Abstract

The most common business enterprise form in Germany today is the Gesellschaft mit beschränkter Haftung (GmbH). The GmbH offers entrepreneurs the flexibility of a partnership combined with limited liability, capital lock-in, and other traits associated with corporations. Authorized in 1892, the GmbH appeared during a period of ferment in German enterprise law and was an early example of the private limited-liability company prevalent in many economies today. The new form reflected challenges created by the corporation reform of 1884, problems in German colonial companies, and the view that British company law had put German firms at a competitive disadvantage. Significant sections of the financial and legal community harbored strong reservations about this legal innovation.

Keywords

GmbHcompany lawcorporationspartnerships
Type
Research Article
Information
Business History Review , Volume 95 , Issue 1 , Spring 2021 , pp. 3 - 32
Copyright
Copyright © The President and Fellows of Harvard College 2021

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Footnotes

This paper is an outgrowth of a project with Ron Harris, Naomi Lamoreaux, and Jean-Laurent Rosenthal. For financial support, I thank the National Science Foundation, the MacMillan Center at Yale, and the Millstein Center for the Study of Corporate Governance at Yale. For excellent research assistance, I thank Svetlana Alkayeva, Iris Gönsch, Theresa Gutberlet, Grace Jones, Anika Kreckel, Yiming Ma, Iris Meyer, Maria Polyakova, Kelli Reagan, Adèle Rossouw, Marian Schmidt, Olga Sedjakina, and Daniela Valdes. For comments and suggestions, I thank Carsten Burhop, Bruce Carruthers, William English, Richard Grossman, Eric Hilt, Marc Flandreau, Susana Martínez-Rodríguez, Tom Nicholas, Daniel Raff, Jochen Streb, Nathan Sussman, John Tang, Jan Thiessen, Richard Tilly, and seminar participants at Harvard University and the University of Pennsylvania. Three referees and the editor also made valuable comments on the manuscript.

References

1 Weber, Max, Grundriss der Sozialökonomik. III. Abteilung, Wirtschaft und Gesellschaft (Tübingen, 1922), 440Google Scholar. (“The GmbH is a rational invention that substitutes for the corporation, which is legally inappropriate especially for smaller, family-like enterprises and enterprises that continue a founder's efforts, and is especially inconvenient given modern publicity requirements.”)

2 Of all multi-owner firms paying the turnover tax (Umsatzsteuer) in 2018, 54 percent were GmbHs. Another 14 percent were GmbH & Co KG, a mixed form discussed below. See “Steuerpflichtige und deren Lieferungen und Leistungen 2018 nach der Rechtsform,” Statistisches Bundesamt (Destatis), last updated 24 Mar. 2020 https://www.destatis.de/DE/Themen/Staat/Steuern/Umsatzsteuer/Tabellen/voranmeldungen-rechtsformen.html.

3 As Richard Posner notes, “In principle, the enterprise could include in all its contracts with customers and suppliers a clause limiting its liability to the assets of the enterprise. But the negotiation of such waivers would be costly. And it would be utterly impractical to limit most tort liability in this way.” Posner, Economic Analysis of Law, 7th ed. (Austin, TX, 2007), 422.

4 Herman Veit Simon, “Deutsche Kolonialgesellschaften: Rechtliche Erörterungen und Vorschläge,” Zeitschrift für das gesammte Handelsrecht, n.s., 19 (1988): 133.

5 Guinnane, Timothy W., “New Law for New Enterprises: The Development of Cooperative Law in Germany, 1867–1914,” Jahrbuch für Wirtschaftsgeschichte 61, no. 2 (2020): 377–401CrossRefGoogle Scholar.

6 Jan Thiessen's subtle analysis serves as a warning: He argues that German ideas of limited liability as reflected in the GmbH were adopted by other countries, which modified them considerably. German reform efforts later reflected those modified versions of German notions. See Thiessen, “Transfer von GmbH-Recht im 20. Jahrhundert – Export, Import, Binnenhandel,” in Rechtstransfer in der Geschichte, ed. Vanessa Duss, Nikolaus Linder, Katrin Kastl, Christina Börner, Fabienne Hirt, and Felix Züsli (Munich, 2006), 446-497. Timothy W. Guinnane, Ron Harris, Naomi Lamoreaux, and Jean-Laurent Rosenthal refer to a number of legal forms collectively as “private limited-liability companies” (PLLCs). These all owe something to British law (in the form of the 1862 Corporations Act and then the 1907 Private Limited Company) as well as to the GmbH. See Guinnane et al., “Putting the Corporation in Its Place,” Enterprise & Society 8, no. 3 (2007): 687–729. On the French Société à responsabilité limitée (SARL) created in 1925, see Guinnane and Rosenthal, “Adapting the Law to Fit the Facts: The GmbH, the SARL, and the Organization of Small Firms in Germany and France, 1892–1930” (paper presented at the annual meetings of the Economic History Association, 2012); on the analogous Spanish form, which dates from 1920, see Guinnane and Susana Martínez-Rodríguez, “Choice of Enterprise Form: Spain, 1885–1936,” Journal of Law, Economics, and Organization 34, no. 1 (2018): 1–26. Neither is a copy of the GmbH, but both were strongly influenced by its example. The Spanish case is especially interesting, as the new enterprise form lacked any statutory elaboration in its first decades. See Martínez-Rodríguez, “Creating the Sociedad de Responsabilidad Limitada: The Use of Legal Flexibility in Spanish Company Law, 1869–1953,” Business History Review 90, no. 2 (2016): 227–49. The Austrian GmbH (1906) is based largely on the German version. See Kahn, Julius, “Die Einführung der Gesellschaften mit beschränkter Haftung in Oesterreich,” Bank-Archiv 6, no. 19 (1907): 205–55Google Scholar.

7 Alfred Chandler, The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA, 1977); Berghoff, Hartmut, “The End of Family Business? The Mittelstand and German Capitalism in Transition, 1949–2000,” Business History Review 80, no. 2 (2006): 266CrossRefGoogle Scholar. For a more extensive discussion of the recent literature on enterprise form, see Timothy W. Guinnane and Jakob Schneebacher, “Enterprise Form: Theory and History,” Explorations in Economic History 76 (2020): art. 101331.

8 The Reich dates from 1871. The 1900 commercial code (Handelsgesetzbuch, or HGB) did not significantly alter the rules described here. This article ignores some details discussed elsewhere. First, briefly, some enterprises formed under the civil law rather than the business law; civil-law firms tended to be very small or established for a short-term end. Second, until 1900 there was legal heterogeneity across Germany and even within some Germany states for civil law. For an overview of German company law in the nineteenth century, see Timothy W. Guinnane, “German Company Law, 1794–1897,” in The Research Handbook on the History of Corporate and Company Law, ed. Harwell Wells (Northhampton Elgar, 2018), 170-204. Today the menu of forms available to German firms is larger, and civil-law firms are more popular than in the period studied here.

9 The German rule forbidding the limited partner's involvement in management is weaker than its French counterpart, the défense d'immixtion. See Röder, Erik, “Die Kommanditgesellschaft im Rechtsvergleich: Hintergründe der unterschiedlichen Karriere einer Rechtsform,” Rabels Zeitschrift 78, no. 1 (2014): 109–54Google Scholar.

10 On “entity shielding,” see Henry Hansmann, Reinier Kraakman, and Richard Squire, “Law and the Rise of the Firm,” Harvard Law Review 119 (March 2006): 1333–403. They argue that the ability to protect a firm's assets from its partners’ personal creditors was historically prior to and economically more important than limited liability for investors, which protects an investors’ assets from obligations created by the firm. Section 119 of ADHGB prevents an owner's private creditors from seizing the firm's assets to satisfy debts; the creditor can claim only the debtor's share of the firm's profits. On the other hand, the OHG automatically becomes bankrupt if any owner is personally bankrupt (§123-3. The code gives partnerships the right to act in their own name (§111 ADHGB).

11 Britain adopted general incorporation with limited liability in 1855. A variant on the KG in Germany resembled a corporation. The limited partnership stakes in the “share partnership” (Kommanditgesellschaft auf Aktien, or KGaA) could be traded on markets. Several German states required concessions for the KGaA after 1861. The ADHGB treats the KGaA as a type of corporation, reducing its attractiveness. An analogous form was more popular in France. See Charles E. Freedman, Joint-Stock Enterprise in France, 1807–1867: From Privileged Company to Modern Corporation (Chapel Hill, 1979).

12 The index is Otto Donner's, as reported in Carsten Burhop, Die Kreditbanken in der Gründerzeit (Frankfurt, 2004), Abbildung Figure 1, 28.

13 See Levin Goldschmidt, “Alte und Neue Formen der Handelsgesellschaft,” reprinted in Goldschmidt, Vermischte Schriften, vol. 2 (Guttentag, 1901), 334. Goldschmidt was a leading commercial lawyer and served on the Reichstag's drafting committee (Kommission) for the 1884 Corporates Act as well as the committee of experts (Sachverständigenrat) for the 1889 Cooperatives Act. (Verhandlungen des Reichstags, 1884(4), Aktenstuck Nr 128, 1028.) The practice of issuing corporate shares with only some of the nominal value paid in was not restricted to Germany. See, for example, John Turner, “The Development of English Company Law before 1900,” in Wells, Research Handbook, 121-141. The 1884 Corporations Act in Germany strictly regulated the transfer of shares whose value had not been fully paid in.

14 Section 124 of ADHGB limits an owner's ability to withdraw from the firm prematurely. However, section 125 lists capacious grounds for dissolving the partnership early, including the impossibility of attaining its goals or the misbehavior or incapacity of an owner. The partnership agreement could provide for the firm's continuation even if an owner died (§123-2). The significantly higher mortality rates prevailing in the 1880s warrant stress, as some simple calculations show. The chance that two male forty-five-year-old partners would both survive five years would be about 80 percent. Calculation assumes independent chances of death and the Coale-Demeny Model “West” Level 10 male model life table, ė0 = 39.696.

15 Some view capital lock-in as the corporation's defining feature. See Blair, Margaret M., “Locking In Capital: What Corporate Law Achieved for Business Organizers in the Nineteenth Century,” UCLA Law Review 51, no. 2 (2003): 387Google Scholar; and Blair, Margaret M. and Stout, Lynn A., “Specific Investment: Explaining Anomalies in Corporate Law,” Journal of Corporation Law 31 (2005): 719Google Scholar.

16 Deutscher Handelstag, Mittheilungen an die Mitglieder 28, 1888 no. 17, 4–5.

17 The Handelstag is the national association that represents the city- or district-level Handelskammer. The latter is usually translated as “Chamber of Commerce,” but the German institution has a semiofficial status that the U.S. counterpart lacks. Robert Esser, Die Gesellschaft mit beschränkter Haftbarkeit: Eine gesetzgeberische Studie (Berlin, 1886), 8; Otto Bähr, Gesellschaften mit beschränkter Haftung (Leipzig, 1892), 3.

18 Deutscher Handelstag, Mittheilungen 28, 1888 no. 6, 3–4.

19 Oechelhäuser (1820–1902) was a member of the Prussian House of Deputies (1852–1853) and of the Reichstag (1878-1893). Contemporaries referred to him as a “Grossindustrieller”; he was not seen as someone with a personal stake in small enterprises. For his biography, see Wolfgang von Geldern, Wilhelm Oechelhäuser als Unternehmer, Wirtschaftspolitiker und Sozialpolitiker (Munich, 1971). Oechelhäuser summarizes his proposal for a revised corporation law in Die Nachtheile des Aktienwesens und die Reform der Aktiengesetzgebung (Berlin, 1878).

20 In their statements on the possibility of a new form, the Handelskammer in Saarbrücken and Schweidnitz called attention to this problem and to the larger social benefits of preserving family firms. Deutscher Handelstag, Mittheilungen 28, 1888 no. 18, 10–11.

21 Deutscher Handelstag, Mittheilungen 28, 1888 no. 17, 2.

22 Bähr, Gesellschaften, 3; Deutscher Handelstag, Mittheilungen 28, 1888 no. 18, 4. Eugen Schmalenbach (1873–1955), a central figure in the development of systematic accounting standards in Germany, opposed publishing financial accounts “mainly because he wanted to avoid [the] divulging of business secrets, above all to foreigners.” Quoted in Jeffrey Fear and Christopher Kobrak, “Diverging Paths: Accounting for Corporate Governance in America and Germany,” Business History Review 80, no. 1 (2006): 32.

23 The cooperative form did not suit this end. Until 1889, German cooperatives had to have unlimited liability, and a cooperative has “variable capital” in the sense that when a member leaves, the cooperative has to refund his shares.

24 The GmbH's Begründung stresses this problem. When proposing legislation, the government produced an “explanation” (Begründung) that elucidated the law and explained drafting choices. This article mentions two: one for the 1884 Corporations Act (“Allgemeine Begründung,” Verhandlungen des Reichstages, vol. 77 [1884], doc. no. 2) and the other for the 1892 GmbH legislation (“Begründung,” Verhandlungen des Reichstages, vol. 125 [1890/92], Anlage 660, 3726).

25 For Bismarck's views on colonies, see Otto Pflanze, Bismarck and the Development of Germany, 2nd ed., vol. 3, (Princeton, 1990), 114–27. For recent general accounts, including discussions of domestic political concerns, see Sebastian Conrad, German Colonialism: A Short History, trans. Sorcha O'Hagan (Cambridge, U.K., 2012); or Winfried Speitkamp, Deutsche Kolonialgeschichte (Stuttgart 2014).

26 Hammacher claimed that nothing held back the commercial development of the colonies more than the existing company law. Verhandlungen des Reichstags, 1887/88 (II), 4 Feb. 1888, 710. In this address he refers to both the fixed capital requirement and the problems of certifying financial results for a distant enterprise. The Chemnitz Handelskammer makes a similar argument. Jahres-Bericht der Handels-und Gewerbekammer zu Chemnitz 1888 (Chemnitz, 1889), 5.

27 Veit Simon, “Deutsche Kolonialgesellschaften,” 88–90, 115-131; Viktor Ring, Deutsche Kolonialgesellschaften: Betrachtungen und Vorschläge (Berlin, 1887), 37. Jakob Rießer (1853–1932), a lawyer and banker active in National Liberal politics before World War I, quotes an 1886 resolution of the Deutsche Kolonialverein noting that the ALR would soon be replaced by an all-German civil code (the BGB), after which special charters granted under the ALR would not be possible. The BGB's first draft, completed in 1888, was badly received; the final version was not in force until 1900. Rießer, Zur Revision des Handelsgesetzbuchs (Stuttgart, 1887), 293. For a history of the BGB, see Michael John, Politics and the Law in Late Nineteenth-Century Germany: The Origins of the Civil Code (Oxford, 1989).

28 Gesetz wegen Abänderung des Gesetzes, betreffend die Rechtsverhältnisse der deutschen Schutzgebiete, vom 17. April 1886. Reichsgesetzblatt S. 75, no. 1776, 15 Mar. 1888.

29 The German interest in British company law was not reciprocated. In one of the few discussions of German company law undertaken in connection with possible reforms to British law, Ernest J. Schuster contributed a memo to an 1895 Board of Trade Committee Report in which he stressed the German corporation over the still-new GmbH. “Report of the Departmental Committee Appointed by the Board of Trade,” 1895, Command Papers 7779, Appendix 12-26.

30 Harold James, A German Identity, 1770–1990 (London, 1989). For a summary of the vast literature on Britain's relative decline, see Sidney Pollard, Britain's Prime and Britain's Decline: The British Economy, 1870–1914 (London, 1971). Taking a rare view, in its summary of member views, the Handelstag noted that Britain's economic advantages predated the 1862 Companies Act there. Deutscher Handelstag, Mittheilungen 28, no. 18, 18.

31 The Handelskammer in Chemnitz, for example, argued explicitly against something like the English company in Germany. Jahres-Bericht der Handels-und Gewerbekammer, 14.

32 Bähr, Gesellschaften, 1–2. This “straw men” claim precedes Britain's 1897 Salomon case, which upheld a company that really was a single entrepreneur and six straw men (in this case, the owner's wife and children). See Ron Harris, “The Private Origins of the Private Company: Britain, 1862–1907,” Oxford Journal of Legal Studies 33, no. 2 (2013): 364–69.

33 Deutscher Handelstag, Mittheilungen 32, no. 5, 41. He made a similar argument in a Reichstag speech at the time of the 1884 corporation reform (Verhandlungen des Reichstages 24 Mar. 1884, 220-22, and 28 June 1884, 1149).

34 The total population in 1880 was about forty-five million. For the emigration figures, see Peter Marschalck, Bevölkerungsgeschichte Deutschlands im 19. und 20. Jahrhundert (Frankfurt, 1984), Table 5.1.

35 Goldschmidt, “Alte und Neue,” 337.

36 Ludolf Parisius, Die Genossenschaftsgesetze im Deutschen Reiche (Berlin, 1876).

37 Wolfgang Friedrich, “Die Entwicklung des Rechts der bergrechtlichen Gewerkschaften in Preußen von 1850 bis zum Ersten Weltkrieg,” in Recht und Entwicklung der Großunternehmen im 19. Und frühen 20. Jahrhundert, ed. Norbert Horn and Jürgen Kocka (Göttingen, 1979), 195.

38 Verhandlungen des Reichstages, vol. 77 (1884), 237.

39 Verhandlungen des Reichstages, 11 Sitzung, 24 Mar. 1884, 221.

40 The text is reprinted in Verein zur Wahrung der wirtschaftlichen Interessen von Handel und Gewerbe, no. 25, Die Erweiterung des Handelsrechts durch Einfügung neuer Gesellschaftsformen (Berlin, 1891), 51–61.

41 Esser, Die Gesellschaft, 11; Ring, Deutsche Kolonialgesellschaften; Rießer, Zur Revision des Handelsgesetzbuchs.

42 Hammacher (1824–1904) was elected to the Prussia House of Deputies in 1863 and represented several Reichstag constituencies intermittently in the period between 1871 and 1898. He was a leading National Liberal and served from 1885 to 1892 as the vice president of the Kolonialverein.

43 Hammacher, Verhandlungen des Reichstages, 4 Feb. 1888, 710–11; Oechelhäuser, Verhandlungen des Reichstages, 28 Feb. 1888, 1155–56.

44 Deutscher Handelstag, Mittheilungen an die Mitglieder 28, no. 18, 1888, 2.

45 The brief debates at the three readings can be found in Erste Berathung des Entwurfs eines Gesetzes, betreffend die Gesellschaften mit beschränkter Haftung, Verhandlungen des Reichstages, vol. 119 (1890/92), 4303–7; Zweite Berathung des Entwurfs eines Gesetzes, betreffend die Gesellschaften mit beschränkter Haftung, Verhandlungen des Reichstages, vol. 120 (1890/92), 4878–80; and Dritte Berathung des Entwurfs eines Gesetzes, betreffend die Gesellschaften mit beschränkter Haftung, Verhandlungen des Reichstages, vol. 120 (1890/92), 4881–86. For an account of the drafting process, see Walther Hadding, “Die Initiativen des Reichsjustizamtes und des Reichsjustizministeriums zur Gestaltung des Gesellschaftsrechts,” in Vom Reichsjustizamt zum Bundesministerium der Justiz (Bonn, 1977), 263-324. In his engaging doctoral dissertation, Benjamin Peter Hein assigns to Oechelhäuser a central role in the GmbH's creation. Oechelhäuser's persistent advocacy and his willingness to accede to other's ideas played an important role in keeping the idea alive. The final GmbH statute, however, owes little to Oechelhäuser's legislative proposal. The Reich Justice and Interior Offices decided early on to base the new form on the bG. See Hein, “Emigration and the Industrial Revolution in German Europe, 1820–1900” (PhD diss., Stanford University, 2018); Werner Schubert, “Die Gesellschaft mit beschränkter Haftung: Eine neue juristische Person,” Quaderni fiorentini per la storia del pensiero guiridico moderno 11–12 (1982): 605n40; and Jutta Limbach, Theorie und Wirklichkeit der GmbH (Berlin, 1965), 16.

46 The official text of the GmbH appears, as usual, in the Reichsgesetzblatt (vol. 1892, no. 24, pp. 477–99). The paragraph numbers used in the text above refer to the final version of the law and do not correspond precisely to the draft discussed in the Begründung.

47 “Begründung,” Verhandlungen des Reichstages, vol. 125 Anlage 660, 3737. Section 13 of the GmbH statute is identical to section 213 of the 1884 Corporations Act and to section 17 of the 1889 Cooperatives Act. It differs from section 111 of ADHGB (concerning the partnership) in adding the phrase “as such has its independent rights and obligations.” Werner Schubert suggests the GmbH Begründung was being coy; most people thought of the corporation as a legal person, so using Corporation Act's section 213 suggested the same for the GmbH. Schubert, “Die Gesellschaft,” 593.

48 In one corporation abuse in the 1870s, a promoter overvalued his in-kind contributions. The 1884 law required external evaluation of such contributions. Esser's section 4 would require similar evaluations for the GmbH.

49 The 1980 reform explicitly allows the formation of a one-owner firm. See Zöllner, Wolfgang, “100 Jahre GmbH: Überlegungen zu Grundfragen des GmbH-Rechts aus Anlaß ihres Jubiläums,” JuristenZeitung 47, no. 8 (1992): 381–85Google Scholar.

50 “Bericht der XXV: Kommission über den derselben zur Vorberathung uberwiesenen Entwurfs eines Gesetzes, betreffend die Gesellschaften mit beschränkter Haftung. Nr. 660 der Drucksachen,” Verhandlungen des Reichstages, vol. 126 (1890/92), Appendix 774.

51 “Begründung,” Verhandlungen des Reichstages, vol. 125, Appendix 660, 3732.

52 The standard handbook for the GmbH stresses that the manager's tenure depended on the owners’ “whim” (Willkür). Many GmbHs, of course, had a majority owner who retained control over the firm even under the default rules. Max Hachenburg, Staub's Kommentar zum Gesetz, betreffend die Gesellschaften mit beschränkter Haftung, 4th ed. (Guttentag, 1913).

53 In remarks to the Handelstag, for example, Hammacher made light of the various private and religious organizations that had used the corporate form. Deutscher Handelstag, Mittheilungen 28, no. 6, 3–5. The eingetragener Verein used by German not-for-profits today dates from the 1900 BGB.

54 Richard Brooks and Timothy W. Guinnane, “The Right to Associate and the Rights of Associations: Civil-Society Organizations in Prussia, 1794–1908,” in Organizations, Civil Society, and the Roots of Development, ed. Naomi Lamoreaux and John R Wallis (Chicago, 2017), 291–330.

55 German per-capita NDP in 1892 (using 1913 prices) was about 496 marks. Hoffmann, Walther G., Das Wachstum der deutschen Wirtschaft seit der Mitte des 19. Jahrhunderts (Berlin, 1965), 454–55Google Scholar, 172–74.

56 Jahresbericht der Handelskammer zu Bremen (Bremen, 1888), 23–24. This concern comes up in several responses from the Handelskammern discussed above; see Deutscher Handelstag, Mittheilungen 28, no. 18, 6–7. The government was aware of this concern; see “Begründung,” Verhandlungen des Reichstages, vol. 125, Anlage 660, 3730–31.

57 “Begründung,” Verhandlungen des Reichstages, vol. 125, Anlage 660, 3737–38.

58 “Begründung,” Anlage 660, 3747.

59 In Guinnane et al., “Putting the Corporation in Its Place,” Figure 1 reports enrollment in Prussian business registries in January and September of years ending in 2 and 7. German sources do not yield comprehensive micro-level evidence on partnerships, unfortunately, so we cannot study the substitution patterns in detail. In another context, the new PLLC form displaced ordinary partnerships above all but also had some effect on the adoption of corporations and limited partnerships. We cannot assume the same would hold in Germany, where the corporation was less flexible. See Guinnane and Martínez-Rodríguez, “Choice of Enterprise Form.”

60 The registrations summarized in Guinnane et al., “Putting the Corporation in Its Place,” are for all firms, while the establishment census is limited to “Gewerbe” (roughly, industry and trade). Some GmbHs do not qualify as Gewerbe.

61 Wartime inflation and the 1921–1923 hyperinflation reduced the real value of the minimum capitalization for GmbHs (as well as corporations) and were in part responsible for a large increase in the number of such firms. See Leslie Hannah, “Weimar's Capitalist Spring: A Liberal Exception to Corporate Germany's Sonderweg,” in The Impact of the First World War on International Business, ed. Andrew Smith, Kevin D Tennent, and Simon Mollan (Cham, 2016), 225–43.

62 Goldschmidt, “Alte und Neue,” 336. The source underlying the Prussian data in Figure 1 of Guinnane et al., “Putting the Corporation in Its Place,” is a published abstract of the notice a firm files with the commercial registry. In many (but not all) cases, the notice mentions a prior firm. Only 6 of the 578 GmbHs formed in the 1907 sample indicate they were previously corporations.

63 Burhop, Carsten and Lehmann-Hasemeyer, Sibylle, “The Berlin Stock Exchange and the Geography of German Stock Markets in 1913,” European Review of Economic History 20, no. 4 (2016)CrossRefGoogle Scholar, Table 3.

64 Haus der Abgeordneten, Entwurf eines Gesetzes betreffend die Abänderung des Einkommensteuergesetzes und des Ergänzungssteuergesetzes (1906), Drucksache Nr. 9, 77–78.

65 Ernst Neukamp, “Die Deutschen Gesellschaften mit beschränkter Haftung, eine Neue Gesellschaftsform,” Zeitschrift für Volkswirtschaft, Socialpolitik, und Verwaltung (1899): 337; Goldschmidt, “Alte und Neue,” 322.

66 Fränkel, Franz, Die Gesellschaft mit beschränkter Haftung: Eine volkswirtschaftliche Studie (Tübingen, 1915), 252Google Scholar.

67 For example, Deutscher Handelstag, Mittheilungen 28, 1888 no. 18, 12.

68 Bähr, Gesellschaften, 15.

69 Greulich, Carl, “Der Kredit der Gesellschaften mit beschränkter Haftung,” Jahrbücher für Nationalökonomie und Statistik 87, no. 6 (1906): 721–43Google Scholar.

70 Siegfried Lindemann concludes that about one in two hundred corporations were bankrupt in the year 1906 compared with about one in seventy-five GmbHs. Hans Crüger, who led the Schulze-Delitzsch cooperative organization, noted that the GmbH was used in ways that made its bankruptcy rate difficult to compare with other legal forms. Lindemann, Das wirtschaftliche Gebahren der modernen Gesellschaftsformen in den verschiedenen Gewerbezweigen nach den Ergebnisse der Konkursstatistik (Halle, 1911); “Gutachten des Herrn Justizrats Professor Dr. Hans Crüger,” Verhandlungen der zwei und dreißigsten Deutschen Juristentages (Berlin, 1914), 25.

71 For summaries of the jurisprudence and references to the cases, see Arnold Freymuth, Die GmbH in der Rechtsprechung der deutschen Gerichte von 1911 bis 1916: Nach den amtlichen Sammlungen und andern Quellen bearbeitet von A. Freymuth (Cologne, 1917); and Georg Reidnitz, Die GmbH in der Rechtsprechung der deutschen Gerichte seit 1892: Nach den amtlichen Sammlungen und anderen Quellen bearbeitet (Cologne 1918).

72 Carl Greulich, “Die finanzielle Belastung der Gesellschaften mit beschränkter Haftung in den einzelnen deutschen Bundestaaten,” Annalen des deutschen Reiches für Gesetzgebung, Verwaltungs und Statistik (1907): 842.

73 Malte Hesselmann, Die GmbH & Co., 2nd ed. (Cologne, 1957), 3–6.

74 Lubinski, Christina, “Path Dependency and Governance in German Family Firms,” Business History Review 85, no. 4 (2011): 713CrossRefGoogle Scholar.

75 Fear, Jeffrey and Kobrak, Christopher, “Banks on Board: German and American Corporate Governance, 1870–1914,” Business History Review 84, no. 4 (2010): 712–13CrossRefGoogle Scholar; Fear and Kobrak, “Diverging Paths.”

76 Fear and Kobrak, “Diverging Paths.”