By implementing the so-called Fifth Anti-Money Laundering Directive into German law, the Transparency Register has undergone numerous changes for companies, shareholders and beneficial owners. There is a concrete need for action, especially for companies with regard to their reporting obligations.
On 1 January 2020 the law on transposing the so-called Fifth European Anti-Money Laundering Directive into German Law became effective. Some of the resulting changes in the German Money Laundering Act pose new challenges for companies of the non-financial sector, especially for commercial and industrial companies. Companies should counter these by adapting their money laundering compliance system.
The discharge of a managing director is at the discretion of the shareholders’ meeting and is approved by the management of the company. To what extent is this discretion restricted if the manager has violated the duties assigned to him? Can the shareholders of the GmbH & Co KG make direct claims against the managing director of the limited partnership general partner at all? The Higher Regional Court of Frankfurt decided on the effectiveness of a discharge for a managing director of a limited partnership general partner who had not noticed for years that an employed administrator of the company had embezzled money.
The Annual Tax Act 2019 came into force on 1 January 2020. In addition to measures for tax incentives for electromobility, changes have been made to, inter alia, the Income Tax Act, the Trade Tax Act and the Value Added Tax Act. Some of the new amendments that are particularly relevant for shareholders, employers and commercial enterprises are briefly presented in this newsletter article.
In a recently published judgment (default judgment of 11 July 2019 – case no. IX ZR 210/19), the Insolvency Senate of the Federal Court of Justice [Bundesgerichtshof – BGH] affirmed that the practice of deferring claims arising from intra-group exchange contracts, which is quite common in many groups, is contestable under insolvency law – which, in view of the extensive insolvency law consequences of repayment to the insolvent assets, requires the greatest attention, particularly in times of an economic downturn.
In its decision of 24 January 2019 the Vienna Supreme Court [Oberster Gerichtshof – OGH] determined for the first time that so-called gender clauses in the company agreements of commercial partnerships are unethical and thus void because they violate the principle of equality guaranteed under constitutional law. The decision issued under Austrian law is considered to have a signaling effect on German corporate law. Against this background, regulations in regard to corporate succession should be critically reviewed and adjusted, if necessary.
The Federal Ministry of Justice and Consumer Protection presented under the name “Corporate Liability Law [Verbandssanktionengesetz]” the draft bill on combating corporate crime. If the Grand Coalition implements this draft in its planned form in the legislative process, practice will face far-reaching challenges. It is therefore advisable to already familiarize with the planned changes.
In May 2019, the Government Commission had already adopted a new version of the German Corporate Governance Codex (hereinafter “Codex 2019”). However, the Codex 2019 has not yet entered into force because the Government Commission initially wanted to wait for the ARUG II (Act Implementing the Second Shareholders’ Rights Directive [Gesetz zur Umsetzung der zweiten Aktionärsrechterichtlinie]) to enter into force. The Federal Parliament [Bundestag] and the Federal Council [Bundesrat] have now passed the ARUG II on 14th/19th November 2019. The act is expected to enter into force in January 2020, therefore the Codex 2019 is expected to enter into force soon. The set of rules with recommendations for the management of stock exchange-listed German companies has been fundamentally revised and contains a completely new structure and system. An overview of the most important innovations and changes.