Effect of Registration

The effect of registration in the commercial register and land register describes the legal consequences that a register entry has for companies, properties, and third parties. Central to this is the constitutive effect, where the right only arises through registration – for example, in the formation of a GmbH –, as well as the declaratory effect, which merely publicly attests to an already existing right. Additionally, the publicity effect ensures that entries are accessible to everyone and that legal transactions can rely on their accuracy. Particularly relevant in practice is the curative effect: According to § 16 para. 1 GmbHG, it allows the bona fide acquisition of business shares if the transferor is registered as a shareholder; § 5 para. 2 GmbHG also clarifies that in the event of a conflict between the articles of association and the entry, the register status prevails over third parties. Correct register entry thus protects against liability risks, facilitates transactions, and creates planning security in business life. Those transferring company shares, purchasing real estate, or changing company data should therefore be well aware of the effect of registration to avoid legal disadvantages and ensure seamless compliance.