Features of the license

The license to oper­ate a tem­po­rary employ­ment agency is grant­ed to a spe­cif­ic per­son or legal enti­ty and is not trans­fer­able. The license is then valid for all branch estab­lish­ments or branch­es of the license hold­er. Var­i­ous events affect­ing the hold­er of the license can there­fore also have an effect on the license.

Death of the license holder

The license does not pass to the heirs of a deceased hold­er. The heirs may there­fore no longer con­clude new con­tracts for the assign­ment of tem­po­rary employ­ees after the death of the licence hold­er. How­ev­er, most authors agree that they can still wind up exist­ing con­tracts with­in one year (sec. 2 (4) sen­tence 4 of the Ger­man Law on Tem­po­rary Employ­ment (AÜG, Arbeit­nehmerüber­las­sungs­ge­setz)).

Transformation

The license expires when the tem­po­rary employ­ment agency is divid­ed (sec. 123 (1) of the Trans­for­ma­tion Act (UmwG, Umwand­lungs­ge­setz) or merged (sec. 2 UmwG) or when a full trans­fer of assets takes place (sec. 174 (1) UmwG). The rea­son for this is that the trans­fer­ring legal enti­ty also ceas­es to exist. How­ev­er, if the legal enti­ty con­tin­ues to exist, for instance, in the case of a divi­sion (sec. 123 (1) UmwG), the license does not expire, but remains with the pre­vi­ous legal enti­ty.

The license also remains in effect in the case of trans­for­ma­tions that change the legal form, because the trans­fer­ring legal enti­ty mere­ly changes its legal form (sec. 190 et seqq. UmwG) and because the trade name of the com­pa­ny, i.e. the com­pa­ny name, is retained (sec. 200 UmwG). How­ev­er, if sole pro­pri­etor­ships or com­pa­nies under civ­il law are trans­formed to cor­po­ra­tions, the pre­vi­ous legal enti­ty and with it the license will expire.

Transfer of operations

When oper­a­tions are trans­ferred, the key cri­te­ri­on is whether or not the hold­er of the license con­tin­ues to be a legal enti­ty after the trans­fer of oper­a­tions.

If the licence hold­er becomes part of anoth­er com­pa­ny, i.e. is includ­ed in this com­pa­ny, a new tem­po­rary employ­ment agency license must be applied for by the receiv­ing com­pa­ny.

If the licence hold­er is merged with anoth­er busi­ness and a new com­pa­ny is estab­lished, a new legal enti­ty is also cre­at­ed, so that a new tem­po­rary employ­ment agency license must be applied for.

Only if the licence hold­er ‘swal­lows’ anoth­er busi­ness will the licence hold­er con­tin­ue to exist and does not require a new license, but must of course inform the Fed­er­al Employ­ment Agency (Bun­de­sagen­tur für Arbeit) of any changes (new address, new CEOs, etc.).

Change in corporate bodies or shareholders

The licence remains in effect if cor­po­rate bod­ies or share­hold­ers of a cor­po­ra­tion change. The license only expires if the legal enti­ty of a cor­po­ra­tion is dis­solved or if a part­ner of a part­ner­ship changes.

Insolvency

Insol­ven­cy of the tem­po­rary employ­ment agency does not auto­mat­i­cal­ly mean that its license expires. How­ev­er, the Fed­er­al Employ­ment Agency may revoke the license due to a lack of eco­nom­ic per­for­mance.