GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
for listed and non-listed companies. Its requirements are mandatory. The HGB, the WpHG, the WpÜG, the European and German Securities Prospectus rules (the European WPVO and the German WpPG), the Stock Exchange Act ( Börsengesetz , or BörsG) and the MAR provide further mandatory regulation in relation to, inter alia, listed companies’ corporate governance. To promote a high corporate governance standard, the DCGK contains corporate governance standards in the form of recommendations and suggestions for listed companies with a two-tier corporate govern - ance system; however, the rules of the DCGK shall also be applied correspondingly by listed compa - nies with a single-tier corporate governance system (see 2.1 Principal Bodies or Functions ). The DCGK is enacted not by the legislature, but by the German Corporate Governance Commission, and is therefore not a statute or an ordinance, but rather “soft law”, so the standards set in the DCGK are principally volun - tary. Recommendations shall be complied with and, if not, deviations have to be explained and disclosed (the principle of “comply or explain”) in a declaration of compliance ( Entsprechenserklärung ), to be resolved upon annually by the responsible corporate govern - ance bodies of the listed company. The declaration of compliance is to be included in the declaration on corporate governance, which itself is part of the management report. The issuance of the declaration of compliance is obligatory. Deviations from suggestions are allowed without disclosure. In practice, listed companies seek to comply with the standards set out in the DCGK, in particular the rec - ommendations. 1.4 Stock Exchange Requirements Developments Following the Standortfördergesetz (StoFöG) entering into force on 10 February 2026, it is now possible for an AG to issue shares with a par value of less than EUR1 (so-called penny stocks). Furthermore, the arti - cles of association of stock corporations may permit multiple voting rights, although there are strict restric - tions for listed companies, particularly regarding how long multiple voting rights may remain in effect follow - ing a stock exchange listing.
In addition, the StoFöG implements far-reaching changes to the regulations governing delisting from the regulated market. These changes primarily con - cern the expansion of the admissibility of a delisting application without a tender offer. In addition to the cases previously codified in the Stock Exchange Act, delisting is now also possible in the following cases: • if the securities continue to be traded on an SME growth market (in Germany, this refers exclusively to the “Scale” trading segment of the Frankfurt Stock Exchange) (so-called “downlisting”); or • if insolvency proceedings have been opened against the issuer’s assets. Conversely, a delisting from an SME growth market – which was previously possible without a tender offer – will in future require such an offer. The predominant board structure of an AG and an SE follows the two-tier corporate governance system, with a management board ( Vorstand ) managing and representing the company, and a supervisory board ( Aufsichtsrat ) supervising the management board, in each case accompanied by the third corporate body, the general meeting ( Hauptversammlung ). The man - agement board manages the company under its own responsibility and at its own discretion. It is not sub - ject to any instructions from the supervisory board or the general meeting. However, the management board is subject to the prior approval of the supervisory board for certain business transactions and measures, either foreseen in the articles of association of the company or by the supervisory board itself – eg, in the rules of procedure for the management board. Administrative Board A single-tier corporate governance system with one board, as primarily known in other jurisdictions, is only allowed in Germany within an SE. The board is called the administrative board ( Verwaltungsrat ), and 2. Corporate Management 2.1 Principal Bodies or Functions Management Board
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