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 […]
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 […]
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 […]
Information requests by a trustor in a German limited partnership
The German Federal Court of Justice (Bundesgerichtshof, BGH) has long recognized the right of a partner in a partnership to request information such as names, addresses, and shareholdings of the other shareholders and trustors. As these principles were developed by the BGH before the General Data Protection Regulation (GDPR) took effect, there was uncertainty regarding […]
A managing director’s declaration on company letterhead is considered an action of the limited liability company
Anyone acting as a GmbH managing director on behalf of their company must ensure that it is clear to the contractual partner that they are not acting in their own name but as a representative of the company. The representation may also be apparent from the circumstances. However, if the representation is not sufficiently clear, […]
Submission of a closing balance sheet in the event of conversions and its (tax) retroactive effect – an overview
The closing balance sheet of the transferring legal entity to be attached to the notification of a conversion with the commercial register can also be submitted at a later date, provided this is done promptly after the notification. This applies regardless of whether the subsequently submitted closing balance sheet had already been prepared at the […]
The introduction of Commercial Courts in Germany
The “Act to Strengthen Germany as a Location for Justice by Introducing Commercial Courts and English as the Language of the Courts in Civil Jurisdiction” (Justice Location Strengthening Act) came into force on 1 April 2025 and aims to increase Germany’s attractiveness as a location for international business and commercial disputes.