Finally some legal certainty regarding the obligation to notarize convertible loan agreements?!
Convertible loan agreements play an important role above all in the area of venture capital financing – whether at the very beginning as part of early-stage financing or also later in the growth phase, for example for interim financing between two investment rounds. The formal requirements to be taken into account when concluding convertible loan […]
GmbH shares encumbered with usufruct – risk of indirect hidden profit distribution and arrangements
Usufruct arrangements allow the separation of assets and income of an entrepreneurial investment. In this way, different income tax and inheritance or gift tax objectives can be achieved. The ruling of the German Federal Fiscal Court of 14 February 2022, file no: VIII R 29/18 on an indirect hidden profit distribution in connection with GmbH […]
The tax-exempt donation of a family home in German inheritance and gift tax law
In the course of the Inheritance Tax Reform Act of December 24, 2008, the legislator revised the tax exemption for the donation of a family home and extended it to cases of acquisition upon death. A ruling by the BFH (German Federal Fiscal Court) dated December 01, 2021 (II R 18/20) on the question of […]
No analogous application of § 179a AktG to the limited partnership
In its ruling of 15 February 2022 (II ZR 235/20), the German Federal Court of Justice (Bundesgerichtshof – BGH) abandoned its previous case law according to which the legal concept of § 179a German Stock Corporation Act (Aktiengesetz – AktG) also applies to limited partnerships. § 179a AktG is not (any longer) analogously applicable to […]
Managing director of a GmbH obliged to set up a compliance management system
In its ruling of 30 March 2022 (12 U 1520/19), the Nuremberg Higher Regional Court decided that managing directors are obliged to set up a compliance management system, with the consequence that they are liable for any resulting damage if they fail to do so. The ruling additionally specifies the specific monitoring obligations of the […]
GmbH (German LLC) formation now digitally possible
On August 1, 2022, the Implementation Act for the EU Digitization Directive 2019/1151 (“DiRUG”) came into force. From now on, the formation of a GmbH or a UG (entrepreneurial company) is also possible from the comfort of one’s own desk chair instead of on the premises of a notary. However, notarial assistance is still required. […]
The new version of the German law on documenting essential applicable conditions for employment relationships (“Nachweisgesetz”, hereinafter referred to as “Documentation Act”) contains more extensive obligations of the employer to confirm working conditions in writing
As of 1 August 2022, the new version of the Documentation Act came into force, which implemented the EU Directive on Transparent and Predictable Working Conditions („Working Condition Directive“). This results in numerous additional necessities with regard to the written confirmation of the essential working conditions by the employer to the employees.
The tax reduction under § 34 para. 3 EStG – also used by an unlawful granting
In its ruling of 28 September 2021 (BFH VIII R 2/19), the Federal Fiscal Court (Bundesfinanzhof – BFH) decided that the tax reduction under § 34 para. 3 German Income Tax Act (Einkommensteuergesetz – EStG) is also used in the event that it was granted unlawfully and without prior application. This result may seem surprising […]
The virtual general meeting of the stock corporation – from a temporary exception to a permanent solution?
The COVID-19 Act of 27 March 2020 allows stock corporations and related legal forms to hold their general meetings as purely virtual meetings without the physical presence of shareholders until the end of August 2022. Based on the largely positive experience with this form of meeting, the German government presented a draft law on 27 […]
Current reporting requirements in the transparency register and upcoming changes due to the EU money laundering regulation
As of 1 August 2021, the transparency register was restructured by the Transparency Register and Financial Information Act (Transparenz-Finanzinformationsgesetz Geldwäsche – TraFinG Gw). In this process, the so-called notification fiction for the reporting of beneficial owners of legal entities to the transparency register was abolished, which prompted numerous companies to make entries. The transitional periods […]