Digitization in associations: What the new provision of Section 32 (2) of the German Civil Code means for associations

The COVID 19 pandemic has led to increased digitization in many areas of our lives - including associations. As early as March 2020, Section 5 (2) no. 1 of the Act on Measures in Corporate, Cooperative, Association, Foundation and Condominium Law to Combat the Effects of the COVID 19 Pandemic (COVMG) enabled digital decision-making in associations. However, these regulations were only effective until the end of August 2022.

As a result of the now planned amendment to Section 32 (2) of the German Civil Code (BGB), it will once again be possible in the future for all associations - and this time permanently - to hold members' meetings and pass resolutions digitally. Not only that: hybrid meetings will also be possible again in the future, where members can participate both physically and electronically. This development opens up new opportunities for associations to organize meetings flexibly and efficiently. However, the new regulation differs from the scope of the facilitations of the COVMG to the extent that the circulation procedure will not be facilitated in future in accordance with the formerly effective section 5 (2) no. 2 COVMG.
Even before the pandemic, it was already possible in principle for resolutions to be passed digitally in associations, provided that this was regulated accordingly in the association's articles of association. The planned amendment to Section 32 of the German Civil Code now extends this possibility to all those associations that have not made such a provision. The planned amendment is an important step towards maintaining association life even in times of absences, restrictions or pandemics and thus moving it further into the digital age. It should be noted that the new Section 32 (2) of the German Civil Code (BGB) is dispositive and a deviating provision can be made in the Articles of Association.

However, the new provision applies not only to general meetings, but also to the adoption of resolutions by the Executive Board and other bodies of the association, as it applies via the reference in Section 28 of the German Civil Code (BGB). Furthermore, it also applies to foundation bodies, as section 86 sentence 1 BGB refers to section 28 BGB.

The amendment was adopted by the Bundestag on February 9, 2023 and has thus already received the green light from the Bundestag. After execution by the Federal President and publication of the law in the Federal Law Gazette, the amendment will enter into force on the day after promulgation. Retroactive effect from September 1, 2022, as of which the COVMG was no longer effective, has expressly not been provided for by the legislator.

PBC legal takeaways: Due to the soon-to-be effective Section 32 (2) of the German Civil Code (BGB), meetings can be held digitally or hybrid even without a corresponding provision in the articles of association. This enables a flexible and efficient organization of meetings and can lead to an increase in participation.

However, associations can also opt out of digitization, but in most cases this will require an amendment to the articles of association.

As a law firm, we advise associations on all legal issues related to the digitization of decision-making and help you meet the legal requirements for a digital or hybrid association meeting. Feel free to contact us for an individual consultation.