Silent partnership or participation (stille Gesellschaft)

Silent partnerships
have no entity or quasi-entity status, but are mere financial par-
ticipations in another business on a contractual basis. Aside from
their tax planning uses, silent partnerships are used especially to
allow third parties to share profts and risks of a business without
acquiring any rights or assuming any obligations not specifcally
covered in the silent partnership agreement. Silent partnerships
also permit the silent partner to avoid disclosing its investment,
since silent partnerships are generally not registered in the
commercial register.

However, various higher regional courts
have held that silent partnerships must be registered in the
commercial register if the business in which the silent partner
participates is an AG, because the creation of a silent partnership
is effectively an agreement to transfer a portion of the proft,
which affects the distribution of total proft to the shareholders.