GERMANY Law and Practice Contributed by: Christoph Nolden, Nicolas Ott, Stefan Mendelin and Thomas Glaser, SZA Schilling, Zutt & Anschütz
above aims to promote stock corporations as legal vehicles for start-up companies. Moreover, it is possible to conclude shareholders’ agreements ( Gesellschaftervereinbarungen ) outside the articles of association, so that further variations to the shareholders’ rights can be agreed upon. In this respect, however, shareholders of listed stock corporations should closely watch the regulations on so-called acting in concert. 1.5 Minimum Share Capital Requirements When establishing a corporation, minimum capital must be raised, as follows. • Stock corporation – The minimum share capital is EUR50,000. When the company is founded, the founders must contribute at least 25% of each share. Contributions in kind must be made in full. • Limited liability company – The minimum share capital is EUR25,000. When the company is founded, the founders must contribute at least 25% of each share and at least 50% of the share capital in total. When establishing a partnership, there is no minimum capital that the partners must contribute to the com- pany’s account prior to formation. However, the mem- bers of a partnership can ‒ in principle ‒ be held liable for the company’s liabilities with their personal assets. 1.6 Minimum Number of Shareholders Corporations can be formed with only one sharehold- er; such corporations are usually limited liability com- panies. In contrast, the minimum number of partners for a partnership is two. A partnership with only one partner is not possible under German law. Such part- nership would automatically dissolve, with the assets and liabilities automatically passing to the remaining shareholder. This type of “accrual” is often used in international mergers. In principle, there are no restrictions regarding the nationality, residence or status of shareholders for any type of company. However, the articles of association may provide for certain restrictions. Further restric- tions may result from foreign trade regulations in cer- tain industries, which have become more important
in recent years owing to geopolitical changes (eg, for companies in the defence sector, but also in other sectors such as software and infrastructure). In fact, there has been an increasing number of cross-border M&A deals in Germany where foreign trade regulations played a major role. 1.7 Shareholders’ Agreements/Joint Venture Agreements Shareholders’ agreements are a common instrument for co-ordination between shareholders of limited liability companies and, to a lesser extent, between shareholders of stock corporations. In stock corpo- rations, shareholders’ agreements are often made as an instrument for agreeing on regulations that – by statute – cannot be regulated in the articles of asso- ciation. However, when implementing shareholders’ agreements between shareholders of listed stock cor- porations, the regulations on acting in concert must be taken into account (see 1.4 Variation of Sharehold- ers’ Rights ). 1.8 Typical Provisions in Shareholders’ Agreements/Joint Venture Agreements Typical provisions in shareholders’ agreements are: • appointment rights for the members of the board of management and/or supervisory boards; • co-disposal rights (tag-along) and co-disposal obligations (drag-along); • agreements on voting; • information rights; and • dividend and liquidation preferences (for limited liability companies). There is no general statutory obligation for public disclosure of shareholders’ agreements. Further- more, according to the current predominant view in legal commentary, shareholders’ agreements can be enforced by action for performance ( Erfüllungsklage ). This also includes voting agreements ( Stimmbind- ungsvereinbarungen ). Nevertheless, the enforcement of a titled claim poses particular problems. In many cases, enforcement pro- ceedings would take too long, given that the share- holders’ meeting relevant for the vote will generally have taken place in the meantime. The option of
61 CHAMBERS.COM
Powered by FlippingBook