In point of fact, many companies effectively have a choice as to whether they
register their German operation as a branch. The specific sets of facts and
circumstances are rarely completely unambiguous when taken as a whole, so
that those wishing, or not wishing, to register a branch may see, or not see,
a need to register, depending entirely upon which aspects of the local
arrangements they place the most emphasis.
A branch, registered or not, is not a separate legal entity from its foreign parent
company. The parent business therefore always bears ultimate legal liability for
all liabilities and obligations of the branch. However, all suits brought before
German courts against the company on the basis of obligations, commitments
or liabilities entered into by the branch must first be directed against the
branch, that is, they will be dealt with locally. In practice, recourse to the
foreign business is to be had only where either the branch has been wound up
or otherwise disappeared, or where it is unable to meet its obligations from
locally available resources.