Auction Business; Application for a License

The auction of another person’s personal property, real property, or rights requires a license. 

Auctioneers are generally subject to certain prohibitions; for example, they may not bid on their own behalf—either personally or through another person—at their own auctions, nor may they purchase auction items entrusted to them, nor may they auction movable property from the range of goods they carry in their business, unless this is customary.

Furthermore, when conducting business, the auctioneer is subject to the provisions of the Auctioneer Regulation (VerstV); for example, he must

• prepare a list of the items to be auctioned no later than two weeks before the auction, in which the auction items of each client must be uniformly identified
• notify the competent authority of each auction no later than two weeks before the scheduled auction date, in writing or electronically, specifying the location and time of the auction as well as the type of goods to be auctioned
• provide an opportunity to inspect the auctioned goods for a period of at least two hours
• Keep records of every auction commission and its execution

In the case of partnerships, each managing partner is considered a business operator; in the case of legal entities, the permit is granted to the legal entity itself.

Auctioneers with special expertise, with the exception of legal entities, may be publicly appointed by the competent authority (see “Related Topics”).

The authorities have the right to request information from and inspect the business operations of business operators. Upon request by the authorities, the parties concerned must provide the information necessary for monitoring business operations. Furthermore, the authorities are authorized to enter the business premises to conduct inspections and examinations there.

In addition to obtaining a license, the business must be registered with the competent municipality.

The requirements for obtaining a license are that the business owner be of good character and have sound financial standing.

The applicant’s good character is verified based on a certificate of good conduct issued by the authorities and information from the Central Trade Register.

Sound financial standing is determined based on information regarding entries in the registry maintained by the insolvency court or the enforcement court.

You must apply for the permit in writing or electronically with the appropriate authority.

• Valid ID card or passport
• Proof of sound financial standing
  Information regarding entries in the register maintained by the insolvency court or the enforcement court (Section 26(2) of the Insolvency Code, Section 915 of the Code of Civil Procedure)
• Proof of Good Conduct: Certificate of Good Conduct for government agencies (Section 30(5) of the Federal Central Register Act) and information from the Central Trade Register (Section 150(5) of the Trade Regulation Act)
• If an authorized representative is present: a written power of attorney and identification for both the principal and the authorized representative
• Documents required for registered companies, civil law partnerships, and limited liability companies (GmbH) in the process of being formed:
  
  • For registered companies (including GmbHs): an extract from the commercial register or comparable registration documents from abroad (with a German translation),
  • for civil law partnerships: partnership agreement,
  • for a GmbH in the process of being formed: a copy of the notarized articles of incorporation and a power of attorney from the founders stating that business operations are to commence prior to entry in the commercial register.

Fee: 50 to 1,000 euros in accordance with the Schedule of Fees under the Cost Act (Rate No. 5.III.5/13.1)