GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
1. Corporate Governance Requirements 1.1 Corporate Forms and Governance Requirements German law differentiates between capital companies and partnerships. The following chapter will focus on capital companies, as these are the most important and most regulated forms of companies in Germany. Capital Companies Capital companies are legal entities where the liability is limited to the assets of the company – ie, the share - holders’ liability is limited to what they have invested in the company. The most common legal forms of capital companies are the limited liability company ( Gesellschaft mit beschränkter Haftung , or GmbH) and the stock corporation ( Aktiengesellschaft , or AG). Other forms of capital companies are the European stock company ( Societas Europaea , or SE) and the partnership limited by shares ( Kommanditgesellschaft auf Aktien , or KGaA). The KGaA is a capital company, but also has some elements of a partnership. Partnerships Partnerships are characterised by the personal liabil - ity of the partners. The most popular legal form of a partnership is the limited partnership ( Kommandit- gesellschaft , or KG), consisting of limited partners whose liability is limited to a certain amount agreed and disclosed in the commercial register, and general partners with unlimited liability. However, the general partner may have the legal form of a capital company, thereby limiting its liability. German law also acknowledges the partnership under civil law ( Gesellschaft bürgerlichen Rechts , or GbR) and the general partnership ( Offene Handelsgesells - chaft , or OHG), with unlimited liability of their partners. 1.2 Corporate Governance Legislation and Regulation The primary sources for corporate governance require - ments for capital companies in Germany (GmbH, AG, KGaA, SE) are:
• the German Limited Liability Companies Act ( Gesetz betreffend die Gesellschaften mit beschränkter Haftung , or GmbHG); • the German Stock Corporation Act ( Aktiengesetz , or AktG); • the European and German acts on SEs – in par - ticular, the European SE-Verordnung (SEVO) and the German SE - Ausführungsgesetz (SEAG); • the German Commercial Code ( Handelsgesetz- buch , or HGB); • the Reorganisation of Companies Act ( Umwand- lungsgesetz , or UmwG); • the German Securities Acquisition and Takeover Act ( Wertpapiererwerbs - und Übernahmegesetz , or WpÜG); • the Market Abuse Regulation ( Marktmissbrauchs- verordnung , or MAR); and • the Securities Trade Act ( Wertpapierhandelsgesetz , or WpHG). Beyond this, the German Corporate Governance Code ( Deutscher Corporate Governance Kodex , or DCGK) sets out further corporate governance rules for listed companies, which differentiate between rec - ommendations and suggestions. In 2020, the DCGK introduced the category of principles, which precede the recommendations and suggestions regarding a certain subject matter and outline the fundamentals of the applicable law. In 2022, the DCGK was amended, substantiating some ESG aspects as well as the guidelines on inter - nal controlling in response to new legislation on finan - cial integrity. Non-governmental regulations such as applicable listing rules enacted by the stock exchanges also establish corporate governance requirements. Cer - tain industry sectors (eg, banks) are subject to further regulation with respect to, inter alia, their corporate governance. 1.3 Companies With Publicly Traded Shares Shares of an AG, an SE and, less commonly, a KGaA may be listed on a stock exchange. The primary source for corporate governance requirements concerning listed AGs and KGaAs, as well as (to a lesser degree) SEs, is the AktG, as it differentiates between rules
251 CHAMBERS.COM
Powered by FlippingBook