Provisions in the articles of association that allow for exclusion of a co-shareholder from the company without objective reason are generally immoral and therefore null and void. Under certain conditions, the Federal Court of Justice makes an exception to this principle for so-called management models. On this basis, the corporate participation of managers has become a popular incentive tool – now the Munich Higher Regional Court is pointing out limits with its decision of 13 May 2020.
In its decision of 26 February 2020 (file no. XII ZR 51/19), the Federal Court of Justice (BGH) further refined its case law on the effective representation of a limited liability company (GmbH) by one of several managing directors with joint power of representation. This was prompted by the conclusion of a limited commercial lease agreement by one of several GmbH managing directors.
On 1 January 2021, the Act for the further development of restructuring and insolvency law (Sanierungs- und Insolvenzrechtsfortentwicklungsgesetz, SanInsFoG) comes into force. Germany insolvency law will now provide a legal framework for pre-insolvency restructurings. Crisis-ridden companies have the possibility to negotiate with their creditors themselves and to reorganize themselves on the basis of a restructuring plan. The highlight: if a majority agrees with the plan, it applies to all parties involved. In addition, it is up to the debtor to decide just how much judicial support he needs. In view of the ongoing COVID-19 pandemic, the new regulations come at the right time.
The Annual Tax Act 2020 was adopted on 16 December 2020 and introduces a number of amendments, which include, in particular, necessary adjustments to EU law and the case law of the European Court of Justice. Furthermore, the legislature is responding to (unwelcome) Federal Tax Court case law and implementing other supplementary measures to mitigate the COVID-19 pandemic.
While the announced reform of the Real Estate Transfer Tax Act continues to be a long time coming, there has been a fundamental realignment with regard to internal group restructurings. Several rulings of the Federal Fiscal Court as well as a recent application decree of the tax authorities largely put an end to the discussions on the interpretation of sec. 6a GrEStG. As a result of the legal and planning certainty that has now been achieved, the exemption provision will become considerably more important in practice.
With the recent update of its FAQs, the Federal Administrative Office has greatly expanded the criteria for determining a company’s beneficial owners. Companies subject to reporting requirements, shareholders and beneficial owners should be aware of the practical consequences this will have on their notification and reporting obligations.