Service content
Description of the
For a long time now, local authorities (cities, municipalities, counties and districts) have been carrying out their duties not only through their core administrative functions, but also by making use of specific legal forms which local government legislation (the Municipal, County and District Codes) designates as ‘enterprises’. In the context of new developments in competition and the market, but also in line with the aim of granting greater autonomy to individual sectors, local authorities are increasingly outsourcing tasks from their core administration and transferring them to companies. Local government legislation recognises the following types of companies:
- the municipal enterprise (a special fund with its own financial management but without legal personality, which is run outside the general administration by specific bodies – the works committee and the works management)
- the municipal enterprise (a body governed by public law with its own legal personality)
- Companies organised under private law (e.g. a limited liability company (GmbH) or a public limited company (AG)).
Prerequisites
Local authority company law – that is, the sections of local government legislation dealing with local authority companies (for example, Articles 86 to 97 of the Local Government Act) – essentially governs the conditions for the establishment of individual enterprises, as well as their organisation and integration within the local authority’s sphere of responsibility.
The most important condition for admissibility is that the undertaking which the local authority intends to establish, take over or significantly expand must be required to serve a public purpose. Examples of public purposes include the local authority’s electricity, gas and water supply services or its public transport services. The exclusive or primary intention of making a profit does not serve a public purpose. Under local government legislation, this principle applies not only to municipal enterprises but to municipal activities in general. Activities outside the scope of what is known as municipal public services (e.g. municipal tourism promotion or general municipal economic development) are only permissible if their purpose is not, or cannot be, fulfilled just as well and cost-effectively by the private sector.
Legal basis
- Articles 86–97 of the Local Government Act for the Free State of Bavaria (Local Government Act – GO)
Municipal and local authority organisations
- Articles 74–85 of the District Ordinance for the Free State of Bavaria (District Ordinance – LKrO)
Businesses in the district
- Articles 72–81a of the District Regulations for the Free State of Bavaria (District Regulations – BezO)
Businesses in the district
- Articles 86–97 of the Local Government Act for the Free State of Bavaria (Local Government Act – GO)