Municipal enterprises; operations

For a long time, local authorities (cities, municipalities, counties and districts) have not only fulfilled their tasks through their actual administration, but have also used special legal forms, which the municipal laws (municipal, county and district regulations) refer to as companies. In connection with new competitive and market developments, but also in an effort to give individual areas greater independence, local authorities are increasingly outsourcing tasks from their core administration and transferring them to companies. Municipal laws recognize the following types of companies:

• the own enterprise (a special asset with its own economic management, but without its own legal personality, which is managed outside the general administration by special bodies - works committee and works management)
• the municipal enterprise (a public law institution with its own legal personality)
• Companies in the legal form of private law (e.g. limited liability companies - GmbH - or public limited companies - AG).

Municipal company law, i.e. the sections of the municipal laws that deal with municipal companies (e.g. Articles 86 to 97 in the municipal code), essentially regulates the admissibility requirements of the individual companies as well as their organization and integration into the municipal area of responsibility.

The most important prerequisite for admissibility is that the company that the municipality wishes to establish, take over or significantly expand is required for a public purpose. A public purpose includes, for example, the municipal electricity, gas and water supply or the municipal transport services. No public purpose is served by the exclusive or primary intention of making a profit. According to the municipal laws, this statement applies not only to municipal companies, but to municipal activities in general. Activities outside the so-called municipal services of general interest (e.g. municipal tourism promotion or general municipal economic development) are only permitted if their purpose is not or cannot be fulfilled just as well and economically by the private sector.

• Art. 86 - 97 Municipal Code for the Free State of Bavaria (Municipal Code - GO)

  Companies of the cities and municipalities

• Art. 74 - 85 County Code for the Free State of Bavaria (County Code - LKrO)

  Companies in the district

• Art. 72 - 81a District Code for the Free State of Bavaria (District Code - BezO)

  Companies in the district