GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
or fall below certain thresholds (3%, 5%, 10%, 15%, 20%, 25%, 30%, 50%, 75%) and if their positions in financial instruments relating to shares exceed or fall below these thresholds (except for the 3% thresh - old). The notification is to be published by the issuer and can be viewed on its website at any time. Share - holders of listed companies who directly or indirectly hold at least 10% must notify the issuer of the objec - tives pursued with the acquisition and the origin of the funds used within 20 trading days of reaching or exceeding this threshold. According to the Money Laundering Act ( Geldwäsche- gesetz , or GWG), which implements the EU Anti-Mon - ey Laundering Directive, companies need to disclose their beneficial owner(s) in the transparency register, irrespective of whether their shares are publicly traded or not. 5. Corporate Reporting and Disclosures 5.1 Financial Reporting Requirements All companies except small partnerships have to pre - pare an annual financial statement. Capital companies also have to prepare a management report, unless the company is a small company (based on the cri - teria set out in 3.10 Payments to Directors/Officers ). The annual financial statements and the management report differ in that the annual financial statements are primarily for presentation purposes, whereas the management report is more of an analysis and com - mentary. The management report includes information on the risk profile of the company and its risk management system. For large, listed companies, the HGB requires a declaration on corporate governance and a non- financial declaration, including statements on envi - ronmental, social and labour-related concerns, among other matters. In addition to preparing the annual financial state - ments and the management report, listed companies are also required to prepare and publish a half-year report. Some stock exchanges may require further reporting with respect to a certain market segment.
Certain industry sectors – for example, banks and oth - er financial institutions – are subject to further report - ing requirements. 5.2 Corporate Governance Arrangement Disclosure The declaration on corporate governance includes information on how the management board and the supervisory board conducted their duties, and also has to address other issues, such as whether quotas for female members of the management and super - visory board have been met, and whether or not the company has a diversity concept (see 3.3 Board Composition ). Furthermore, listed companies have to publicly declare each year whether they comply with the DCGK (see 1.3 Companies With Publicly Traded Shares ). The declaration is part of the declaration on corporate governance and must be published on the website. The remuneration system and the remuneration report must be published on the company’s website for at least ten years. Furthermore, the principal features of the management remuneration system and the remu - neration of the management board and the supervi - sory board must be disclosed in the annual financial statement and in the management report thereto. The annual financial statement also has to include information on related party transactions that were not at arm’s length. Certain related party transactions must also be disclosed on an ad hoc basis. 5.3 Incorporation and Registration A company must file the following in particular with the commercial register ( Handelsregister ): • the articles of association, including the company’s business name and legal form, registered seat, pur - pose of the enterprise and registered share capital; • the names of the legal representatives, their place of residence and their dates of birth; • if existent, the name and place of residence of authorised officers ( Prokurist ); • in an AG and SE, a list of supervisory and adminis - trative board members; • in a GmbH, a list of shareholders; and
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