Entries by Ester Hahn
honert advises Main Capital Partners on the acquisition of four companies in the DACH region for the enventa group
honert has advised Main Capital Partners (“Main”) on the acquisition of a majority in the companies Nissen & Velten Software GmbH (ERP), texdata Software GmbH (ERP), aruba informatik GmbH (BI) and Litreca AG (financial solutions). Together, the four companies will form a new business software group to be called enventa.
CORPORATE TRANSACTIONS AND THE GDPR: DATA PROTECTION OBSTACLES IN DUE DILIGENCE AND ASSET DEALS
The GDPR is not only omnipresent on the Internet, where it says “We use cookies” e.g. on websites of bakeries, but it also has an impact on (almost) every area of law, including the transaction business. In order to illustrate this, two aspects will be examined in more detail below, firstly the data protection law factors in due diligence in the preliminary stages of a sale, and secondly the handling of personal data by the buyer after an asset deal. In both cases, a “standard market” approach has not yet developed.
NO LIMITATION OF THE FORMATION EXPENSES TO 10% OF THE SHARE CAPITAL IN THE CASE OF OTHER FREE ASSETS OF A GMBH
In its decision of 26 October 2021, the Berlin Appellate Court ruled that the assumption of the formation expenses by a company is not limited in each case to an amount equivalent to 10% of the share capital. A takeover with a higher percentage is possible in particular if the company has free capital available in the amount of a multiple of the share capital.
INCONGRUENT PROFIT DISTRIBUTIONS
Incongruent profit distributions and their tax recognition are a perennial topic in case law and consulting practice. While the tax authorities tend to classify deviating resolutions on the distribution of profits as an abuse of the tax system (§ 42 German Fiscal Code (Abgabenordnung – AO)), acceptance is much greater in the case law of the tax courts. This has now been confirmed once again by the Münster Fiscal Court in a recent ruling.
SPECIAL TAX FEATURES AND PITFALLS IN THE TAXATION OF MANAGEMENT BONUSES OF CONTROLLING SHAREHOLDER-MANAGING DIRECTORS OF A GMBH
In addition to the arm’s length principle, the decisive factor for the recognition for tax purposes of legal relationships between a shareholder and “his” GmbH (German limited liability company) is the respective shareholder’s ability to exert influence. In a ruling dated 12 July 2021, Case No. VI R 3/19, the German Federal Fiscal Court consolidated its previous case law on the taxation of management bonuses of a sole shareholder of a GmbH. We will take this as an opportunity to take a closer look at the tax treatment of legal relationships between a GmbH and its controlling shareholder-managing director, with a particular focus on the taxation of management bonuses.
UPDATE ON EMPLOYEE CO-DETERMINATION RIGHTS WITHIN SUPERVISORY BOARDS
If the number of employees employed by a company exceeds a certain threshold, the law provides for the establishment of a supervisory board co-determined by employees. In accordance with established case law, the number of employees is determined by taking into account past and future developments on the basis of reference periods of several months. In this way, random results due to short-term fluctuations in the number of employees and frequent changes in the structure of the supervisory board are to be avoided. In a new decision, the Bavarian Supreme Court has concretized this case law and strengthened the position of companies.
ARBITRABILITY IV: ANOTHER CHAPTER ON THE ARBITRABILITY OF DISPUTES REGARDING PARTNERS‘ RESOLUTIONS IN PARTNERSHIPS
If a dispute arises between shareholders/partners about shareholders‘/partners‘ resolutions, there is often an interest in a quiet resolution outside the ordinary court proceedings. However, it is important for arbitration agreements between shareholders/partners to meet the legal requirements. These have been developed by the Federal Court of Justice in its decisions Arbitrability II and III. With the most recent decision from 2021 (Arbitrability IV), the court has further specified them. This newsletter article is intended to present the most important learnings from this decision and to provide an outlook on future developments.