On the recognition of gains in the case of partially compensated transfers of individual assets between business assets
In its ruling of December 11, 2025 (IV R 17/23), the Fourth Senate of the Federal Fiscal Court (BFH) confirmed its previous case law, according to which, pursuant to Section 6(5), sentence 3 of the Income Tax Act (EStG), the transfer of individual business assets between different business assets for partial consideration may also be […]
A new legal form for Europe: An overview of the EU Inc. proposal
On March 18, the European Commission presented a draft regulation for the EU Inc. This is a new European corporate entity that will coexist alongside existing legal forms such as the German GmbH or the French SAS, without replacing them. The formation process is intended to be fully digital, completed within 48 hours, and cost […]
The supervisory board’s comprehensive duty to gather information, even during a suspension of business operations
In its decision of October 14, 2025 (Case No.: II ZR 78/24), the Federal Court of Justice clarifies: Even when business operations are suspended, the Management Board’s duty to report (at least) quarterly remains in effect – and with it, the Supervisory Board’s duty to consistently monitor compliance with this requirement. Informal information provided during […]
Responsibilities and legal remedies in a bipartite limited liability company
If a shareholder wishes to enforce claims for damages against a non-shareholder managing director of the company, they must, in principle, choose the route via the company. The German Federal Court of Justice (BGH; judgment of 5 November 2024 – II ZR 85/23) clarifies the principles governing shareholder actions in a German limited liability company […]
Termination of managing director service agreements
There has long been a divergence in case law between the German Federal Court of Justice (Bundesgerichtshof, BGH) and the German Federal Labour Court (Bundesarbeitsgericht, BAG) regarding which notice periods apply when terminating a managing director service agreement. In its judgment of 5 November 2024 (II ZR 35/23), the BGH reaffirmed its legal position on […]
Non-deductibility of tax advisory fees in connection with the calculation of the capital gain from a disposal of shares
In its ruling of 9 September 2025 (ref. IX R 12/24), the German Federal Fiscal Court (Bundesfinanzhof, BFH) ruled that tax advisory fees incurred while preparing the tax return in connection with calculating the capital gain from the disposal of a shareholding, do not constitute deductible disposal costs as defined by Section 17 para. 2 […]
Digitalisation of registered mail calls prima facie evidence into question
The current registered mail process (“Einwurf-Einschreiben”) of Deutsche Post, which is based on digital tracking, no longer provides prima facie evidence (Anscheinsbeweis) of receipt by the addressee. This marks a change from the previously used “peel-off label” system, which offered physical proof of delivery. According to the Hamburg Regional Labour Court (LAG Hamburg, judgment of […]
Gift tax on disproportionate contributions to partnerships
It is not uncommon, especially in family-owned partnerships, for only one partner to make a contribution to the partnership without receiving any consideration in return. In practice, it should not be overlooked that such disproportionate contributions (disquotale Einlagen) may be deemed a gift to the other partners. This article provides an overview of the potential […]
Vesting clauses in employee participation programs put to the test – a follow-up
In July, we already discussed the new ruling by the German Federal Labour Court (BAG) regarding virtual share option rights (ESOP / VSOP). The now published written judgments with full reasoning provide further insight into the landmark decisions from March and warrant renewed analysis. In its reasoning, the BAG emphasizes that virtual share options are […]
Limits on indefinite bad-leaver clauses in shareholders’ agreements
On May 19, 2025, the Berlin Court of Appeal (Kammergericht – KG) issued a decision of practical significance concerning bad leaver clauses in shareholders’ agreements. The court clarified that an indefinite bad leaver clause, under which a dismissal or a termination for cause of the service contract of the managing director results in the complete […]