GERMANY Law and Practice Contributed by: Christoph Nolden, Nicolas Ott, Stefan Mendelin and Thomas Glaser, SZA Schilling, Zutt & Anschütz
2.12 Institutional Shareholder Groups There are several different intensity levels of share- holder influence. To enforce their strategies, investors or other shareholder groups usually first reach out to the company’s management directly (eg, by writing letters to the management with certain requests). In stock corporations, they may in a subsequent or additional step request information from the execu- tive board at the general meeting. The prerequisite for such request in the general meeting is that the requested information must be necessary for the proper assessment of a specific agenda item. Infor- mation can therefore only be requested concerning items on the agenda (including the agenda item for discharge of the management). Ultimately, investors can attempt to appoint special auditors to examine the company’s management. 2.13 Holding Through a Nominee Shareholders have the option of appointing an author- ised representative to exercise their voting rights and information rights at the general meeting. The follow- ing types of representation may be relevant: • representation by a person proposed by the com- pany (see 2.9 Voting Requirements ) or a share- holder group; • representation by another representative appointed by the shareholder; and • representation by proxy advisers. The instructions given to the representative are gener- ally binding. If a representative can decide at their own discretion, the voting rights of the principal are attrib- uted to them under capital market law and may trigger voting rights notifications and acting in concert rules. In principle, a representative may exercise all share- holder’s rights at the general meeting. Beyond only appointing a representative, a shareholder can also transfer their shares to a nominee or trustee. However, following the transfer of the shares, the former share- holder loses their direct voting and information rights vis-à-vis the company, such that they are limited to asserting their rights vis-à-vis the nominee or trustee. Therefore, appointing authorised representatives is usually preferable to transferring shares to a nominee or trustee.
The situation in limited liability companies is different and in detail subject to the provisions in the articles or shareholders’ agreements. The chairman of the meeting conducts the shareholders’ meetings, but shareholders usually have more say in the meetings. This is also true, since shareholders in the meeting directly appoint and may instruct the managing direc- tors. Shareholders whose interest amounts to at least 10% of the total share capital are entitled to request the convocation of a shareholders’ meeting. 2.11 Challenging a Resolution An infringement of administrative rights (eg, voting rights) is often linked to a respective deficiency in the shareholder resolution concerned, which can be asserted by way of an action regarding resolution defi- ciencies ( Beschlussmängelklage ). The further specif- ics mainly depend on the company’s legal form and the seriousness of the resolution’s deficiency. The fol- lowing description will focus on the stock corporation. Serious general meeting resolution deficiencies can be asserted by way of an action for annulment ( Nichtig- keitsklage ). An action for annulment may be brought by any stockholder without restriction. Less serious general meeting resolution deficiencies can be asserted by way of an action for avoidance ( Anfechtungsklage ). The action for avoidance essen- tially requires that the stockholder: • attended the general meeting (in person or by proxy); • purchased shares prior to the publication of the agenda of the general meeting; and • raised an objection concerning the resolution and had it recorded in the minutes of the general meet- ing. There is no requirement for a certain quorum, however. The action for annulment and the action for avoidance are therefore also available to minority stockholders. In the coalition agreement of 9 April 2025 the new Ger- man coalition has committed itself to reform the law on defective resolutions under stock corporation law in order to strengthen legal certainty and competitive- ness in Germany.
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