, Limited? – consequences of Brexit on limited companies with administrative headquarters in Germany
On 29 March 2019 the United Kingdom’s membership in the EU will expire. As a result, companies under the legal form of a Ltd. with administrative headquarters in Germany will lose their freedom of establishment and will no longer be recognized as legal entity in Germany. This could, however, be subject to a transition period […]
Review of foreign investments: experiences since 2017 and further tightening as of 2019
Following the extension of the scope of the review of foreign investments in Germany in July 2017, the German Federal Cabinet [Bundeskabinett] has resolved on another tightening of the scope of investment reviews on December 19, 2018. In addition, an EU-wide legislative procedure in this field is about to be finalized.
Limited partner of a GmbH & Co. KG has no right of action against a third-party managing director of the GmbH & Co. KG’s general partner
According to consistent case-law of the Federal Court of Justice [Bundesgerichtshof – BGH], shareholders can assert certain claims against a fellow partner as litigants in the way of “actio pro socio”. Up to now, it had been a matter of dispute whether or not the limited partner of a GmbH & Co KG is also […]
Real estate transfer tax reform with respect to share deals
On 8th September 2016, the federal states of Hesse, North Rhine-Westphalia and Schleswig-Holstein decided to implement a working group with respect to an intended reform of the real estate transfer tax. The reform targets to close down loopholes with respect to structures which are considered abusive regarding the sale of company shares which (mainly) hold […]
BGH on the determination of insolvency: liabilities II must be taken into account
The Federal Court of Justice [Bundesgerichtshof – BGH] has ruled that when determining insolvency, the liabilities (Liabilities II) that fall due within the three-week period after the reporting date must also be taken into account. Furthermore, the decision specifies the considerable evidence and presentation requirements for managing directors of a limited liability company [Gesellschaft mit […]
Does the German Temporary Employment Act [“Arbeitnehmerüberlassungsgesetz” – AÜG] apply to managing directors?
According to the unanimous view in the literature on the AÜG, provisions under the AÜG are not applicable to managing directors. The Higher Social Court of Berlin-Brandenburg recently ruled that managing directors are subject to a statutory pension insurance due to an unauthorized temporary employment in accordance with the AÜG. Therefore, the question arises, whether […]
A final default of a shareholder loan must be taken into account as a loss on income from capital assets – this is what shareholders should consider in the future
The Federal Court of Finance [Bundesfinanzhof – BFH] passed an interesting decision (file no. VIII R 13/15), regarding the decision of the BFH (file no. IX R 36/15) in Q4: Accordingly, the final default of a loan leads to a loss recognized for tax purposes which must be taken into account on income from capital […]
No entry of a GbR after change of legal form from a GmbH
If a limited liability company [Gesellschaft mit beschränkter Haftung – GmbH] is transformed into a company constituted under Civil Law [Gesellschaft bürgerlichen Rechts – GbR], the question arises, whether it is required to enter the GbR and its shareholders into the commercial register. In practice, such entries have continuously been made, however, the Federal Court […]
Furnishing of upstream securities – here is what managing directors should pay attention to
The Federal Court of Justice [Bundesgerichtshof – BGH] commented on the admissibility of the furnishing of securities granted by companies in favor of their shareholders and on the so-called capital maintenance rules in AGs [Aktiengesellschaft – stock corporation] and GmbHs [Gesellschaft mit beschränkter Haftung – limited liability companies]. Capital maintenance rules have an “indirect” effect […]
Special audit in accordance with German stock corporation law in limited partnerships with many members of the public as limited partners?
The Federal Court of Justice [Bundesgerichtshof – BGH] has consistently extended the analogous applicability of the provisions under corporate law to Limited Partnerships with Many Members of the Public as Limited Partners [Publikums-Personengesellschaften] (hereinafter “Publicly Held Partnership”). However, it has so far not been decided by the BGH, whether the special audit in accordance with […]