Municipal company

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A municipal enterprise (abbreviated KU , in the case of joint municipal enterprises also gKU ) comprises areas of responsibility of a municipal corporation (municipalities, districts and special purpose associations) which are suitable for independent economic management in terms of type and scope and the public purpose justifies this.


German municipal law provides for several organizational design options for municipal companies . Public authorities and offices can as a publicly owned enterprise , self-propelled or private law be organized. While government and private companies are still closely integrated into the local authority , local companies have their own legal personality and are formally legally, economically and organizationally separate from the local authority that supports them. The local political influence and thus the bond with the local authority can be largely shaped by the construction of the partnership agreement or the statutes . The term municipal enterprise expresses that entrepreneurial activity through participation in economic life goes hand in hand with municipal sponsorship.

A municipality can convert independent special assets into an institution under public law (municipal company), and existing governmental and proprietary companies by means of universal succession into municipal companies.


The possibility for a municipality to choose the legal form of an institution under public law for its municipal enterprises was first introduced in Bavaria in July 1995. Rhineland-Palatinate followed the Bavarian model in April 1998, North Rhine-Westphalia in June 1999, Saxony-Anhalt in April 2001, Schleswig-Holstein in June 2002, Lower Saxony in January 2003, Brandenburg in January 2008, Mecklenburg-Western Pomerania in July 2011, and Hesse in December 2011 and Thuringia at the end of July 2013. In the federal states not mentioned, there is no option for municipal companies in the legal form of an institution under public law.

The legal form of an institution under public law was created as an alternative to the legal forms of proprietary operation on the one hand and GmbH on the other hand, both of which are not always viewed as a suitable legal form for municipal companies for different reasons. In contrast to the public-law company, which is run as an independent special fund of the municipality, but without its own legal personality, the municipal company has its own legal capacity . It can therefore appear more freely on the market compared to its own operation. The result of the public-law organizational form of the municipal company and thus the advantage over the private GmbH is that the municipal company may act in accordance with public law within the scope of the tasks assigned to it.

Legal issues

The term “municipal company” is used as a legal term in Bavaria, North Rhine-Westphalia (although not directly in the standard on municipal companies), Saxony-Anhalt and Schleswig-Holstein and in the national literature uniformly for all states.

A local company may also active in other companies participate , but other private parties can (companies or individuals) not participate directly in local companies. All countries provide that in addition to the statutory regulations, ordinances with more detailed provisions on municipal companies are issued.


Municipal companies only take on tasks in the context of services of general interest . These generally include services "which the citizen absolutely needs to ensure a decent existence." Specifically, this includes the provision ( basic supply ) of energy and water supplies , waste management , hospitals , port operations , social housing , cemeteries and public transport, as well as cultural, sporting and understood social offers. In the formal sense, the communal savings banks also belong to the communal enterprises , but are usually not subsumed under this term because their activity as credit institutions does not represent a service of general interest.

Joint municipal companies

After the introduction of the municipal enterprise, a need became apparent to establish joint municipal enterprises of several municipalities. All states (with the exception of Brandenburg) have therefore created the possibility of several municipalities, (rural) districts and districts being able to set up a joint municipal company by agreeing on company statutes. Existing government and own operations can be outsourced to the joint municipal company by way of universal succession; in most cases, a special-purpose association can also be converted into a joint municipal company.


  • Alfred Katz, Jan Seidel, Nicolas Sonder: Municipal Economy: Guide for Practice . Verlag W. Kohlhammer, Stuttgart 2017, ISBN 978-3-17-030494-9
  • Ulrike Kummer: From self-owned or managed company to municipal company. Writings on Public Law, Volume 930, Duncker & Humblot, Berlin 2003, (= dissertation) Regensburg 2002, ISBN 3-428-11201-6 .
  • Ralf-Rainer Piesold: Municipal investment management and controlling . De Gruyter Oldenbourg, Berlin 2018, ISBN 978-3-11-048051-1

Web links

Individual evidence

  1. Bavarian State Chancellery: Ordinance on Municipal Enterprises (KUV) of March 19, 1998 (GVBl. P. 220) BayRS 2023-15-I. § 1 General, Paragraph 5, March 19, 1998, accessed on August 9, 2020 (text applies from: May 1, 2019): “The municipal company bears the designation“ municipal company ”or“ joint municipal company ”next to its name; it can also use the abbreviation "KU" or "gKU". "
  2. Wolf-Uwe Sponer, Ralf Tostmann: Municipal law . Kommunal- und Schul-Verlag, Wiesbaden 2016, p. 166, ISBN 978-3-8293-1194-6
  3. Law amending municipal commercial law of July 26, 1995 (GVBl. P. 376)
  4. ^ Fourth state law amending local authority regulations of April 2, 1998 (GVBl. P. 108)
  5. ^ First law on the modernization of government and administration in North Rhine-Westphalia of June 15, 1999 (GVBl. P. 386)
  6. Law on municipal company law of April 3, 2001 (GVBl. P. 136)
  7. Law to Strengthen Local Self-Government of June 25, 2002 (GVOBl. P. 126)
  8. Law amending municipal company law of January 27, 2003 (GVBl. P. 36)
  9. Law on the reform of the municipal constitution and on the introduction of direct election of the district administrators as well as on the amendment of other municipal regulations of December 18, 2007 (GVBl.I p. 286)
  10. Law on the municipal constitution and amending other municipal regulations of July 13, 2011 (GVOBl. MV S. 777)
  11. Law amending the Hessian municipal code and other laws of December 16, 2011 . In: The Hessian Minister of the Interior (ed.): Law and Ordinance Gazette for the State of Hesse . 2011 No. 26 , p. 786 ( online at the information system of the Hessian state parliament [PDF; 298 kB ]).
  12. Law amending the Thuringian municipal regulations and other laws of July 30, 2013 (GVBl. P. 194)
  13. BVerfGE 66, 248, 258