Entries by Ester Hahn

EFFECTIVENESS OF MAJORITY RESOLUTIONS IN PARTNERSHIPS

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A clause in a partnership agreement of a partnership (Personengesellschaft) which provides for a simple majority of votes for all shareholder resolutions may be interpreted as giving formal legitimation that all matters subject to a resolution by the shareholders are subject to the majority principle (Mehrheitsprinzip). This also includes so-called fundamental transactions (Grundlagengeschäfte) and interventions in the membership rights of shareholders. In principle, this formal legitimation also indicates the material legitimation of a shareholder resolution based on it, unless it is an exercise of majority power against the minority in breach of fiduciary duty.

ESOP TAXATION – GERMAN FEDERAL FISCAL COUT OPENS UP SCOPE FOR THE TAXATION OF STOCK OPTIONS IN CONNECTION WITH A CHANGE OF RESIDENCE

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In the “War for Talents”, start-ups often rely on employee stock option plans (ESOPs) to attract motivated and highly qualified employees and retain them in the long term, as salaries are usually not competitive. An ESOP usually runs for several years and the employee’s circumstances can change during this period. Such a change in circumstances is also the cause for the ruling of the German Federal Fiscal Court (BFH) of 21 December 2022, case no. I R 11/20, which deals with the taxation of stock options in the event of a change of residence. This cross-border case provides an opportunity to take a closer look at the general tax treatment of ESOPs and, at the same time, to highlight any potential for tax structuring.