The Commercial Code, or HGB for short, forms the basis or the basis of the accounting rules in Germany. The HGB contains a large part of the German laws on annual financial statements and reports as well as special regulations for insurance companies, banks and cooperatives. The Commercial Code applies to merchants and for this reason is more specific than the German Civil Code (BGB). Should there be any contradictions between the HGB and the German Civil Code (BGB), the HGB applies in case of doubt.
However, it is also important to know that not all accounting rules are written down in the HGB, but that the principles of proper bookkeeping (GoB) must also be observed by businesspeople.
What is the Commercial Code?
According to definitionexplorer, the Commercial Code contains important rules and regulations for business life and is influenced or supplemented by other laws.
Economic coexistence in Germany must be regulated, which is why there is a commercial code. It is currently being heavily influenced by regulations that apply to all of Europe and it is possible that the commercial code in the form known today could be completely revised or even replaced.
The basic rules for bookkeeping in Germany can be found in the Commercial Code, so every company must adhere to the HGB in its bookkeeping. It thus forms the basis for bookkeeping and accounting. The procedures for annual financial statements, special regulations for banks and cooperatives and the regulations for insurance companies are also regulated here.
The following applies to merchants: The Commercial Code is decisive – if there are contradictions between the BGB and the HGB, the provisions of the HGB apply.
Why do you need the Commercial Code?
The commercial code forms the core of the law of the merchants and thus represents the basis for the entire commercial law in Germany. The HGB regulates the cooperation among merchants.
The Commercial Code is the basis for all commercial law and is binding for merchants – its significance for merchants is greater than the BGB. Without the HGB, economic coexistence would be unregulated, there would be no regulations on bookkeeping, annual financial statements or the like.
The Commercial Code is therefore absolutely necessary in order to create a legal basis for merchants on the basis of which business is possible. Without such a basis, no regulated market or orderly business behavior would be possible.
The difference between partnerships and corporations
It is noteworthy that additional rules apply to corporations, and especially partnerships, but do not apply to the smaller partnerships. These special regulations are usually stricter, for example by explicitly excluding options that exist for the rest of the merchants or by requiring more details in the reports.
In addition, within the group of corporations there are again gradations in the commercial law obligations, which are dependent on sales volume, total assets and the number of employees.
The history of the Commercial Code
As already described, the HGB contains the core of German commercial law and the BGB only applies provisionally to merchants. But currently commercial law is heavily influenced by the legislation of the European Union.
The German HGB was largely in force in Austria from 1939 and on January 1st, 2007, the Austrian Commercial Code (HGB) was largely amended with the Commercial Law Amendment Act (HaRÄG), ÖBGBI I No. 2005/120 and at the same time incorporated into the Company Code ( UGB) renamed.
The forerunner of today’s HGB was the General German Commercial Code (ADHGB) of 1861. The preparatory work for a commercial code was started in 1894, with the primary goal being to apply the commercial law provisions to the civil code (BGB) that was already in existence at that time or was well advanced. to vote. Initially, a universal codification of the entire commercial law was considered, with regard to the reform demands of the practice, but this was refrained from in view of the disputes over the BGB that had already been going on for 10 years. A first draft was published by the Reich Justice Office in 1896. A second revised draft was then passed as a Reich law on April 7, 1897 after changes were made by a commission of the Reichstag. On the 21st
The competent courts
If there are legal disputes between merchants, the Chamber for Commercial Matters at the Regional Court is usually responsible for this in the first instance, provided that one of the parties requests this or directs the complaint to the Chamber.
The voluntary jurisdictions take care of the business register. The local courts, which also keep the commercial register, are responsible for this. In practice, the arbitral tribunals also play a role, alongside the state courts, both nationally and internationally.
The division of the Commercial Code
The HGB is divided into five books:
- The trade booth
The first book of the German Commercial Code contains the most important commercial law terms, such as the term “ merchant ”, the provisions on the commercial register and the trading company as well as regulations on commercial agents and brokers.
- The trading companies and dormant companies
The regulations that are noted in the second book form the core of the law of partnerships.
- Trading books
The third book contains the commercial regulations on bookkeeping, auditing and disclosure, the annual financial statements and specific regulations with regard to registered cooperatives, credit and financial services institutions and insurance companies.
- Commercial transactions
The fourth book regulates the terms and types of commercial transactions, the conclusion of contracts, freedom of contract and general law of obligations as well as property law in connection with commercial transactions.
- Maritime trade
The fifth book regulates maritime trade – in particular the shipowner and the shipping company as well as average, etc.
The special features of the HGB for insurance companies
The HGB is basically applicable to insurance business or to insurance companies in the legal form of the AG and the VVaG. But there are also exceptions and special provisions i. S. v. Regulations in other legal bases, such as the Insurance Supervision Act (VAG). There are also supplementary provisions for insurance companies in the HGB and these include the provisions of Paragraphs 341 – 341p HGB. This serves to map insurance-specific properties of the insurance business in the annual financial statements – specifically, the valuation of assets and the regulation of the approach and valuation of technical provisions.