The German legal system offers a range of options that enable entrepreneurs to assume social responsibility and pursue philanthropic goals alongside their economic endeavors. A Company with Asset Lock could expand the system to include an option for assuming social responsibility (social entrepreneurship).
Social entrepreneurs can already make use of foundation law as a special and proven instrument of philanthropy. For several years now, the restricted-purpose company has been proposed as a supplementary legal form in non-profit law. Its introduction is currently under discussion (as of March 2026).
Taking Social Responsibility
Taking social responsibility represents a corporate identity that combines social value creation with philanthropy and a special spirit of innovation, and can pursue both social and commercial goals.
Social entrepreneurs also act out of philanthropic and altruistic motives and focus their economic activities at least partly on charitable causes. Their goal is to advance social progress and address challenges facing the general public (more on social entrepreneurship).
Social enterprises are therefore not primarily or exclusively focused on maximizing profits for their shareholders or investors. Their activities pursue charitable purposes in equal measure and aim to create added value for society.
Although philanthropic endeavors and non-profit status are at the forefront for entrepreneurs, they can also benefit from a number of economic and internal advantages. These include competitive advantages, employer branding benefits, and location advantages for their company (more on the advantages of social responsibility).
A steadily growing and significant component of social responsibility lies in the promotion of cultural causes for the public good. Here, traditional patronage and arts and culture sponsorship are supplemented by, among other things, the provision of material resources, services, or corporate networks (more on the structure and advantages of cultural responsibility).
Various legal options have been developed for assuming social responsibility.
Responsible ownership companies
Responsible ownership is a model of corporate governance that is particularly conducive to social responsibility and the common good.
In Germany, more than 200 companies already consider themselves to be responsible ownership companies. These include ZEISS, BOSCH, and ZF Friedrichshafen, which are based on foundation structures.
Responsible ownership companies are characterized by the fact that control and decision-making power remain with the entrepreneurs themselves, so that responsibility for decisions is taken where they are made.
In addition, the profits and assets of a responsible ownership company generally remain in the company on a fiduciary basis or are used for charitable purposes.
On 27 October 2023, Frank-Walter Steinmeier said the following about responsible ownership at the “Day of Fiduciary Entrepreneurship”: “Every company that takes even a little of what we understand in the broadest sense by the term ‘responsible ownership’ seriously strengthens the power of the idea of a free and social market economy and strengthens the liberal order, even in the global competition between systems.”
What forms of organization can social entrepreneurs use?
Responsible ownership companies and those that want to combine their economic goals with charitable activities can make use of various legal forms of organization and options offered by the German legal system.
The Company with Asset Lock
The Company with Asset Lock (Gesellschaft mit gebundenem Vermögen; GmgV) could be structured as a legal form variant of the limited liability company (GmbH). This involves a special form of responsible ownership.
At this point in time, it is unclear whether the Company with Asset Lock will be realized (as of March 2026).
The essential feature of the planned company form could be the asset lock. In this case, the profits and surpluses from the current operations of the Company with Asset Lock would remain in the company and serve its purpose. A distribution to the shareholders would be excluded.
The model of an entrepreneurially motivated and actively engaged shareholder could also apply. In particular, this would mean that all shareholders share the same values and charitable motivations and actively contribute to them.
Entrepreneurs would have complete freedom to shape and control their activities, and they could receive appropriate remuneration for their commitment.
There is also a discussion of the shareholders seeing themselves as trustees. According to the concept of the “family of skills and values,” company shares and thus responsibility for the company would be passed on within a close community of shareholders. This would secure the succession of the company and prevent it from being broken up.
"With its own legal form, an additional option is to be made available in addition to the existing legal forms, which will facilitate entrepreneurial succession processes and enable entrepreneurial, public welfare-oriented, and non-profit projects to be realized. Implementation of the proposal would expand private autonomy by providing a further option in the competition between concepts and legal forms," according to the academic draft of the law on the introduction of a company with tied assets.
The tax treatment of the Company with Asset Lock was most recently discussed at a parliamentary evening at the end of February 2026 (as of March 2026).
What opportunities does foundation law offer?
Foundation law offers a proven and flexible structuring tool. Social entrepreneurs can take advantage of the many opportunities offered by foundation law to pursue charitable purposes and engage in philanthropic activities to varying degrees.
A special feature of foundation law is the individual design of the foundation's statutes. Social entrepreneurs can use this to commit themselves to pursuing a specific charitable purpose and, under certain conditions, adapt their statutes to social changes or new legal requirements (more on amendments to statutes in foundation law; more on the new foundation register 2026).
The legal form of the foundation is a "legal entity without members, endowed with assets for the permanent and sustainable fulfillment of a purpose specified by the founder. The foundation is usually established for an indefinite period, but it can also be established for a specific period within which its entire assets must be used to fulfill its purpose (consumable foundation)," according to §80 (1) of the German Civil Code (BGB).
As a special instrument for social entrepreneurship, foundation law offers different forms of foundations and the possibility of conversion in the context of a corporate realignment (more on the conversion options in foundation law).
In contrast to other legal forms, foundation law also offers a special guarantee of continuity. This is because foundations and their activities are fundamentally bound to the founder's wishes, which may include, for example, the pursuit of a charitable purpose.
With regard to responsible ownership, an organization such as a family or dual foundation is a good option if the continuation of the company for the pursuit of a charitable purpose is to be ensured in the long term. With the help of a dual foundation, charitable and private purposes can be combined by enabling philanthropic endeavors and intergenerational asset preservation with tax privileges.
Foundation law allows, among other things, the establishment of a trust foundation, corporate foundation, consumable foundation, family foundation, art foundation, and foundation for the preservation of cultural heritage.
Tax benefits for charitable purposes
If entrepreneurs commit themselves and their corporations to charitable purposes in addition to altruistic ones, and if they pursue the latter “directly, exclusively, and altruistically” through their activities, they can benefit from tax advantages (§§52 et seq. of the German Fiscal Code; AO).
The legislator has regulated which purposes are to be recognized as “promoting the common good” with a catalog of charitable purposes and rewards individuals who commit themselves to these purposes with tax benefits. In January 2026, for example, this catalog was expanded to include the charitable purpose of “e-sports” with the Tax Amendment Act (More on the Tax Amendment Act 2026).
Specifically, recognition of charitable status results in tax benefits such as exemption from income taxes (corporate and trade tax), preferential treatment or exemption from sales tax, and the possibility of financing through tax-privileged donations.
Savings resulting from these benefits can in turn be reinvested for charitable purposes and, for example, for planning new projects or events.
Within the framework of charitable foundations, there are also flexible options for combining philanthropic and private interests. For example, within the framework of a charitable family foundation, relatives can be exempted from tax in accordance with §58 Number 6 AO.
It should be noted that even after establishment as another legal form, it is still possible to convert it into a foundation. Social enterprises can also arise when commercial enterprises are spun off or non-profit enterprises engage in economic activities.
Résumé
In a company with asset Lock, deposits could not be freely utilized. It remains to be seen whether and to what extent the new company form will be introduced.
“The planned asset-lock company could introduce a new option for assuming social responsibility. At the same time, the legal system already provides social entrepreneurs with a valuable tool for this purpose in the form of foundation law. The various types of foundations make it possible to combine tax and economic efficiency with charity.” According to dtb-partner and expert in foundation law and non-profit organizations Bertold Schmidt-Thomé.
Status 03.03.2026