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Joinder Agreement
I need a joinder agreement for a new partner joining our existing partnership, outlining their rights and obligations, including capital contribution, profit-sharing ratio, and decision-making authority, while ensuring compliance with German partnership laws. The agreement should also address dispute resolution mechanisms and confidentiality obligations.
What is a Joinder Agreement?
A Joinder Agreement lets new parties officially join an existing contract or legal relationship under German law. When companies merge, investors join a venture, or new members enter a partnership (Gesellschaft), this document spells out their rights and obligations while keeping the original agreement intact.
In German business practice, these agreements often connect to shareholder agreements (Gesellschaftervertr盲ge) or investment rounds. They're especially useful for startups scaling up and bringing in new investors, as they avoid the need to draft entirely new contracts. The document must comply with German civil code (BGB) requirements for contract formation and written form.
When should you use a Joinder Agreement?
Use a Joinder Agreement when bringing new partners or investors into an existing German business arrangement. This becomes crucial during funding rounds, M&A deals, or when adding shareholders to your GmbH. It's particularly valuable for fast-growing startups that need to efficiently onboard multiple investors without renegotiating the entire agreement.
The timing matters most during business expansion phases, joint ventures, or when restructuring company ownership. German law requires clear documentation of ownership changes, and a Joinder Agreement streamlines this process while ensuring all parties agree to the original terms. It's especially helpful when dealing with international investors joining German entities.
What are the different types of Joinder Agreement?
- Investment-Related Joinder: Used when new investors join German venture capital deals or GmbH shareholdings, focusing on financial rights and obligations
- M&A Joinder: Specifically structured for corporate mergers and acquisitions under German law, addressing asset transfers and liabilities
- Partnership Joinder: Tailored for adding partners to existing German partnerships (Personengesellschaften), outlining management rights
- Consortium Joinder: Designed for large project consortiums or joint ventures, detailing project-specific responsibilities
- Employee Participation Joinder: Used for employee stock ownership programs (ESOP) in German companies, defining share allocation terms
Who should typically use a Joinder Agreement?
- Existing Shareholders: Original parties to the agreement who must approve new joiners to their GmbH or AG
- New Investors: Venture capitalists, angel investors, or institutional funds joining German companies through funding rounds
- Corporate Lawyers: Draft and review Joinder Agreements to ensure compliance with German corporate law
- Management Board: Represents the company in executing these agreements and implementing their terms
- Notaries: Often required under German law to authenticate signatures and verify legal requirements are met
- Company Secretaries: Maintain corporate records and handle documentation of ownership changes
How do you write a Joinder Agreement?
- Original Agreement Review: Obtain and analyze the complete existing agreement to understand all terms being joined
- Party Information: Gather detailed corporate data for new joiners, including registration numbers and authorized signatories
- Shareholder Approval: Confirm existing shareholders have approved the joinder according to German corporate law
- Financial Terms: Document any investment amounts, share allocations, or economic rights being granted
- Compliance Check: Verify alignment with German corporate registry (Handelsregister) requirements
- Signature Requirements: Determine if notarization is needed under German law for your specific case
What should be included in a Joinder Agreement?
- Party Identification: Full legal names and registration details of all existing and joining parties
- Agreement Reference: Clear identification of the original agreement being joined, including date and parties
- Accession Declaration: Express statement that new party agrees to be bound by original terms
- Rights and Obligations: Specific outline of the joiner's position within the agreement structure
- Governing Law: Explicit reference to German law (deutsches Recht) as controlling
- Execution Requirements: Proper signature blocks with notarization provisions if required
- Effective Date: Clear statement of when the joinder takes effect
What's the difference between a Joinder Agreement and an Amendment Agreement?
A Joinder Agreement differs significantly from an Amendment Agreement, though both modify existing contractual relationships under German law. The key distinctions lie in their purpose and effect on the original agreement.
- Primary Function: Joinder Agreements add new parties to an existing agreement while keeping original terms intact, whereas an Amendment Agreement changes the actual terms of the contract
- Scope of Changes: Joinder Agreements only address the new party's accession and rights, while Amendment Agreements can modify any contractual terms
- Approval Requirements: Joinder Agreements typically need consent from existing parties but don't renegotiate terms; Amendment Agreements require all parties to agree to specific changes
- Documentation Impact: Joinder Agreements create an addendum to the original agreement, while Amendment Agreements directly alter the original contract text
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