GERMANY LAW AND PRACTICE Contributed by: Daniel Möritz, Jan Bonhage, Hendrik Bockenheimer, Carl-Philipp Eberlein, Markus Ernst, Matthias Rothkopf, Christoph Wilken and Alexander Rang, Hengeler Mueller
In the case of a German stock corporation, the rights are mainly limited to asking questions, voting in gen - eral meetings, and challenging shareholder resolu - tions in the event of (alleged) violations of applicable corporate law. Certain corporate decisions, such as the amendment of the by-laws or the approval of the sale of all or most of the company’s assets, require a qualified majority of 75% of the capital present at the general meeting. Hence, a veto position to block major corporate transactions requires a participation of at least 25%. A squeeze-out is only available if a shareholder holds 95% or, subject to certain require - ments, 90% of the capital. In the case of a German limited liability company, material additional minority protection rights apply – most notably, a comprehensive right to require the managing directors to answer questions and inspect the corporate records of a company. 4.3 Disclosure and Reporting Obligations Certain foreign investors are required to submit an FDI filing to the MoE for investments in a German com - pany under the German FDI screening regime (see 1.2 Regulatory Framework for FDI ). The FDI filing is typically submitted by the direct acquirer (often an SPV for the acquisition) shortly after signing. The filing needs to contain information on the planned acquisition, the acquirer, the German target, and their respective business areas. When disposing of a German investment, this transac - tion may trigger a mandatory FDI filing for the acquirer (see 7.2 Criteria for National Security Review ). Further disclosure obligations may result from secu - rities law requirements (see 5.2 Securities Regula- tion ) and regulations of financial services or insurance companies (see 8. Other Reviews/Approvals ).
role in the German economy. Banks are expected to remain important financing partners. However, the role of alternative financing sources has grown and is expected to grow further, resulting in a healthy diver - sification of external financing sources (including the trend towards attracting funds from alternative sourc - es outside the traditional public markets). IPO capital markets are still negatively affected by geopolitical tensions and less long-term investor demand, especially for small- to mid-cap IPOs. The bond market remained very active in 2025, with even tighter spreads and more attractive opportunities, especially for hybrid bond and other subordinated bond issuers. For 2026 and beyond, the outlook is positive, particularly for large-cap IPOs. Considering the successful IPOs in the US market and the existing pipeline for IPOs, an additional push may occur in 2026 and beyond from sponsors seeking an IPO exit for their portfolio companies (with many of them expected to be structured as dual-track pro - ceedings) and from transactions that are strategically driven (spin-offs and subsidiary IPOs). Furthermore, the high investment and financing demand associated with infrastructure projects – coupled with investors’ appetite and support from politics – should fuel the capital markets in the coming years. Primary markets legislation in Germany includes the German Stock Exchange Act, the German Stock Exchange Admissions Regulation, the EU Prospec - tus Regulation and the German Securities Prospectus Act. Secondary Markets Regulation 5.2 Securities Regulation Primary Markets Regulation Secondary markets legislation includes the German Securities Trading Act (GSTA), the EU’s Market Abuse Regulation (MAR), and post-admission obligations imposed by the securities exchanges. Notification obligations for major holdings Under the GSTA, holders of shares trading on a reg - ulated market must notify the relevant issuer when reaching, exceeding or falling below certain voting rights thresholds. In addition to direct and indirect
5. Capital Markets 5.1 Capital Markets Overview
Traditionally, bank financing constituted the main financing source for German businesses – espe - cially in the SME sector, which plays an important
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