Entries by Ester Hahn

CLARIFYING JUDGMENT OF THE FEDERAL COURT OF JUSTICE (BGH) ON THE POWER OF REPRESENTATION FOR ACTIONS OF A STOCK CORPORATION (AG) TOWARDS MEMBERS OF THE MANAGEMENT BOARD

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Pursuant to section 112 of the German Stock Corporation Act (AktG), an AG is represented by the Supervisory Board if it acts towards the Management Board. The BGH has recently ruled on when there is no such action towards the Management Board by applying the principles developed with regard to self-dealings in accordance with section […]

POSSIBILITIES OF LEGAL PROTECTION IN REGARD TO SIMULTANEOUS TAX AUDITS

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Nowadays, information is not only worth a lot of money, but rather one of the most important assets of a company. The fiscal authority would like to share information with other countries, without the taxpayer’s knowledgement or possibilities for defence. Furthermore, the tax law only offers insufficient protection, so that an alert involvement in the […]

SCHEDULED ALTERATIONS OF POSTING DIRECTIVE

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In the posting directive dating back to 1996, certain minimum conditions concerning the employment of workers at operations abroad within the European Union are provided which have been adopted in Germany through the law on posting of workers. In March 2016 the European Commission initiated a revision of the directive with the purpose of achieving […]

WARRANTY & INDEMNITY INSURANCE FOR COMPANY SALES – GENUINE ADDED VALUE OR UNNECESSARY PASSING FAD?

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Warranty & Indemnity insurances (W&I) play an increasingly higher role in company sales. The parties to an M&A transaction should familiarize with the fundamental operating principle of this “tool”. This is particularly essential, because meanwhile many sellers require a W&I insurance as a precondition in order to receive a bid during a bidding process.

RISK OF DOUBLE CLAIMS WHEN ISSUING A HARD (EXTERNAL) LETTER OF COMFORT

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Letters of comfort are widely used to secure receivables. From the protection provider’s perspective the particular advantage over other means of securing – such as sureties or guarantee bonds – is the flexibility that allows free decisions about the form of fulfillment of the liability duty accepted. In order to avoid that this advantage becomes […]

REINTRODUCTION OF TAX EXEMPTION ON RESTRUCTURING PROFITS

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By passing the law dated 27 June 2017, the tax exemption on restructuring profits was stipulated once again. However, the readjustments will only become effective in case the EU commission signs off on the new legal readjustment with respect to state aid law. The new law is supposed to apply retrospectively to all debt reliefs/restructuring […]

KARLSRUHE DEALS A SEVERE BLOW: THE LAPSE OF LOSS CARRY FORWARD UPON ACQUISITION OF DETRIMENTAL PARTICIPATION ACCORDING TO § 8c SEC. 1 SENTENCE 1 KSTG IS UNCONSTITUTIONAL

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By decision of 29 March 2017 the Federal Constitutional Court (Bundesverfassungsgericht) declared the partial lapse of loss deduction in the case of a detrimental exchange of shareholders in the amount of over 25% to 50% to be unconstitutional in all law versions between 2008 and 2015. The legislator is obliged to revise the law with […]

ALL UNCLEAR – BGH (FEDERAL COURT OF JUSTICE) RULING ON THE ARBITRABILITY OF DISPUTES REGARDING THE VOIDABILITY OF PARTNERSHIPS’ RESOLUTIONS

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In the event of disputes about the voidability of shareholders’/partners’ resolutions, the parties are usually interested to clarify such dispute fast and silently without recourse to the ordinary courts. However, the special features of German company law made arbitration agreements/clauses for such disputes difficult, especially for corporations such as a GmbH (limited liability company), but […]

STRICTER RULES FOR THE REVIEW OF FOREIGN INVESTMENTS IN GERMANY

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The German Federal Government has enacted stricter rules for the review of foreign investments in Germany with effect as of 18 July 2017. The review criteria remain for the time being whether or not a foreign investment endangers the national security or the public security and order of the Federal Republic of Germany. The interpretation […]

THE NEW TRANSPARENCY REGISTER

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The transparency register is expected to be available online on 27 December 2017 as a new electronic register in addition to existing registers such as the commercial register. The transparency register will contain and make available to third parties information about the “beneficial owner” of legal entities under private law (e.g. GmbH) and registered partnerships […]