In Germany there is no legislation or legal form specifically dealings with SEs. Many organisation which might be considered SEs aspire to the “public benefit status” (available to all legal forms), while the associative form is still the most common one. 

The legal forms used in Germany include, but are not limited to, (i) registered associations (eingetragener Verein or e.V.),  (ii) foundations (Stiftungen), (iii) cooperatives (Genossenschaften) and (iv) LLCs.

Traditional associations were usually founded to practice ideal activities, but this legal form is now often used by its members for economic activities. They have, however, to split their books into an ideal and an entrepreneurial part. They have to work for the benefit of their members and have to fulfil a common benefit. A distinction can be made between ideological associations which hardly ever engage economically and common-benefit and philanthropic associations which are economically active. Most of them have a public benefit status.

Welfare organisations constitute the larges part of the German social economy. They often receive a large part of their budget from the state, which makes them “quasi-public service providers”. However, in the last years they introduced more and more economic activities and therefore are able to contribute their own share to the budget. They must spend all of their earnings to fulfil their social mission. For taxation purposes, they often create social enterprises, providing them with a beneficial status and a good environment.

Foundations are very common in Germany and most of them have a public-benefit status. They are mostly active in the fields of social services as well as education.

Cooperatives have been established to fight poverty and social exclusion of their members. Nowadays, most of them only follow commercial interests. They only are eligible as social cooperatives if they have a social mission.

There are two different forms of WISE in Germany. The first includes people with disabilities, which means they provide opportunities for people who cannot find a job on the “regular” job market. The second form caters to people with permanent labour market disadvantages. They have to spent all their earnings on their stated social goals.

Since 2013 corporations acting under this law can gain the public-benefit status. This enables them to have more freedoms spending their revenues among other things. There is a legal procedure when aspiring the public-benefit status, and they are allowed to use abbreviation “gGmbH”. This status, however, is not a legal form and enterprises have to be re-accredited every third year.

The tax law regulates the public benefit status (as defined by the LLC act) and introduces strict limits on profit distribution. As public benefit organisations count corporations, which act selfless, charitable or religious and support either society at large or certain groups. Organisations with public benefit status are not allowed to build up assets from their income, only from donations. They also must spend all surplus generated by their activities in a period of two years after. However, the status enables to collect tax-deductible donations and provides them with further tax reductions, e.g. reduced VAT rate.

A revision of the act in 2006 widened the possible legal forms of cooperations, including more social and cultural goals for cooperatives. 

1. Kreditanstalt für Wiederaufbau: The “Kreditanstalt für Wiederaufbau” (KfW) provides start-up coaching and financial support for SEs. 

2. Bundesministerium für Wirtschaft und Energie: The BMWi published 2017 a practitioners’ guide with practical advice and the most important players in the field.

3. States: Bavaria, like many other states and cities, supports, co-financed by the European Social Fund, the start up of SEs with a maximum of 30,000 EUR as kick-start funding.

4. EU funds, managed by German authorities, are used on different levels to support SEs.

5. Networks: Many different networks and second-tier associations exist that provide support to SEs. SEND e.V., for example, operates as a less formal network that promotes SE.

6. Competitions and awards: Different competitions like “start social”, “The German Sustainability Award”, and “Lighthouse” provide a further method of support and visibility for SEs. 

7. Mikrokreditfonds Deutschland: Through a network of partners, loans up to 25,000 EUR are available to individuals.

8. Deutsche Bundesstiftung Umwelt: The foundation provides financial support of maximum 70,000 EUR to SEs to initiatives working on sustainable goals.

9. Welfare federations: Large welfare federations have their own banks which are the biggest players in providing loans for SEs. The loans are often coupled with financial advise.

10. Private foundations, big corporations and donations: Foundations and corporations like Volkswagen and BASF finance a large part of German SEs. “Aktion Mensch”, a bundling framework for private donations, represents another big player in financing SEs.