Insolvent, but (for the time being) no obligation to file for insolvency! This is the heart of the insolvency law related legislative measures which have been adopted last week in a rush to secure the existence of German Companies. However, also a number of other insolvency law provisions have been suspended or relaxed so as to facilitate and foster cash inflow and financing activities for the companies affected by the current crisis.
In case of disturbances in existing contractual relationships during the current pandemic, both contracting parties may look for approaches to avoid having to deliver, to pay, to demand or refuse compensation. If contract negotiations currently take place, one will be reflecting upon how to draft the contract, in order to be adequately secured in the future.
The various measures to mitigate the impact of the COVID-19 pandemic now include the establishment of the ESF to support companies for a limited period of time, primarily by providing guarantees but also hybrid or equity financing – a mechanism that was already tested during the financial crisis to support banks.
The directive “amending Directive (EU) 2017/1132 with regards to the use of digital tools and processes in corporate law” is intended to promote digital change in corporate law. With this directive which is part of the so-called Company Law Package of the European Commission the European Legislator has set the legal framework for, inter alia, the online foundation of corporations, the online registration of branch offices and the online submission of corporate documents.
In the course of a transaction in which a company or shares in a company are sold in whole or in part, family-law provisions must often be observed. In this context, the Higher Regional Court of Saarbrücken and the Higher Regional Court of Oldenburg have recently commented on two cases of practical relevance, namely the obligation to obtain the approval of the other spouse in the case of disposition and the approval of a transfer of the limited partner’s share in favor of minors.
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.