A Proprietor, or Inhaber, was a term used in the Habsburg military to denote special honors extended to a noble or aristocrat. The Habsburg army was organized on principles developed for the feudal armies in which regiments were raised by a wealthy noble, called the Inhaber (proprietor) who also acted as honorary colonel. Originally, he raised the regiment, funded its needs, and received a portion of its revenue, which might be plunder or loot. He also shared in its shame or its honors. The Imperial Russian military adopted a similar system.
When the Inhaber was a famous or royal person, a second colonel was chosen from among the nobility to perform his duties. For example, on 16 September 1789, Friedrich Joseph, Count of Nauendorf, led a successful raid on the island of Borecs in the Danube, which garnered massive amounts of supplies from the Turkish forces. On 9 November of that year, he led four squadrons of his regiment to capture Gladova, 10 miles (16 km) from the so-called Iron Gate of the Danube; he was afterward given command of 30th Hussar Regiment Wurmser, named for Dagobert Sigmund von Wurmser. After Wurmser's death, the regiment became known as Nauendorf.
The Inhaber possessed wide powers. First, he could appoint company officers, or at least held the right of refusal. Second, he had considerable legal authority over his regiment, much like that of a feudal lord. A Colonel-Inhaber/Colonel Proprietor was originally a noble (or wealthy aristocrat) who raised the regiment. Subsequently, a noble or an officer who had achieved some distinction was appointed to the regimental position as an "honorary" appointment. Each regiment was identified by the Inhaber's name as well as a number, and when the Inhaber changed so did the regimental name.
There were exceptions to this practice: If the appointment was honorary, a "second" colonel was appointed who would fulfill the duties of the colonel. The 3rd Infantry Regiment (German) was known as the Erzherzog Karl, or Archduke Charles, from 1780–1847, named for Archduke Charles, one of the sons of Leopold II. He ceased to function as its direct commander upon his promotion to Field Marshal in 1796, but several "second" colonels were appointed to carry out the administrative and leadership functions of the regiment. The regiment bore Charles' name until his death in 1847. In another example, Karl Aloys von Fürstenberg was promoted to major general and, at the end of June 1790, given the coveted position of second colonel of the 34th Infantry-Regiment Anton Esterhazy, where he served as the executive officer for Antal Esterhazy, the Regiment's Colonel and Proprietor. Thus, a rising-star—in this case Fürstenberg—performed the day-to-day duties of the Colonel and Proprietor, who is usually a noble and is often posted in a different assignment, sometimes a different location.