What Is a Genossenschaft, Legally? The German Cooperatives Act Explained

The word Genossenschaft gets used loosely, but it's actually a precisely defined legal form. The Genossenschaftsgesetz (GenG), Germany's Cooperatives Act, spells out exactly what a registered cooperative is and how it has to be organised.

The legal definition

Under Section 1 GenG, a registered cooperative (eingetragene Genossenschaft) is a company with a non-fixed number of members, whose purpose is to promote its members' business or livelihood through joint operations. Two things stand out: membership is open, not limited to a fixed group, and the purpose is to benefit the cooperative's own members, not to maximise profit for outsiders.

What the statutes have to regulate

Every cooperative needs statutes (Satzung), which, among other things, must set out under Section 7 GenG the maximum amount an individual member can hold in shares. Under Section 7a, statutes can also allow for multiple shares per member. These statutes are the actual foundation for nearly every practical rule: admission criteria, share amounts, notice periods, and more all vary from cooperative to cooperative as a result. If you're weighing whether membership is even worth it financially, our guide to the real cost and risk of a cooperative share breaks that down.

How a cooperative's governing bodies work

A cooperative is run by an executive board (Vorstand) and overseen by a supervisory board (Aufsichtsrat), similar to a public company. But its real distinguishing feature is the general assembly (Generalversammlung): under Section 43 GenG, every member generally gets one vote, regardless of how many shares they hold. The statutes can carve out exceptions for members who contribute especially heavily to the cooperative's business, but the underlying principle stays democratic. We cover how that plays out day to day in our guide to cooperative self-governance and member voting rights.

How this differs from a GmbH

At a GmbH (limited liability company), voting power is generally tied to the size of a shareholder's capital stake — more shares, more influence. At a cooperative, the opposite principle applies as a rule: one person, one vote, regardless of capital paid in. The purpose differs too: a GmbH is generally geared toward profit for its shareholders, while a cooperative, under Section 1 GenG, exists to benefit its members — for a housing cooperative, specifically affordable and stable housing.

Why this matters if you're looking for an apartment

Because the statutes are the actual legal basis, it's worth reading them before you join, rather than relying only on general information. Admission criteria, share amounts, and notice periods are spelled out there in black and white, and they can differ substantially between cooperatives.

Frequently Asked Questions

What does the German Cooperatives Act regulate?

It defines what a registered cooperative is, what its statutes must contain, and how its governing bodies — especially the general assembly — operate.

Does every cooperative member get an equal vote?

As a rule, yes. Under Section 43 GenG, every member gets one vote regardless of the number of shares held, unless the statutes provide an exception.

How does a cooperative legally differ from a GmbH?

At a GmbH, influence is usually tied to capital shares; at a cooperative, one person generally gets one vote. A cooperative's legal purpose is also to benefit its members, not purely to generate profit.

Where do I find the specific rules for my cooperative?

In that cooperative's own statutes. They set out, among other things, share amounts, admission criteria, and notice periods.

Is every housing cooperative automatically a registered cooperative under the GenG?

In Germany, yes, as long as it's organised as an eG. It then has to meet the Cooperatives Act's requirements for statutes, governing bodies, and membership.