Legal Framework regarding Formal Requirements

The legal validity of declarations and contracts often requires that certain formal requirements be met. The highest form requirement is certification by a notary public (Beurkundung), followed by notarization (Beglaubigung), the statutory or contractual requirement for written form (Schriftform)) and the text form.
Certification by a notary public is required, for example, for a contract on the purchase of real estate (§ 311b para. 1 German Civil Code (Bürgerliches Gesetzbuch – BGB)) and the formation of a limited liability company (sect. 2 para. 1 German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung – GmbHG)); applications for registration in the register (e.g. land register and commercial register) must be certified by a notary public. Whereas certification only confirms the authenticity of the signature, notarization also attests the content of the declaration/contract. In the case of the statutory written form (Schriftform), the document must be signed by the issuer in person with a signature in accordance with § 126 sentence 1 BGB, whereas in the case of the contractually agreed text form, the transmission of the signed document by telecommunication, e.g. by fax or e-mail (with PDF attachment), is usually also sufficient.
The written form (Schriftform) can generally be replaced by “electronic form” (§ 126 para. 3 BGB). However, electronic form requires a so-called qualified electronic signature, which is subject to high (technical) requirements. Various technical measures ensure that, comparable to the written form (Schriftform), a signature with a qualified electronic signature can be attributed to the person signing and the document to be signed without any doubt and, in civil proceedings, evidence-proof(§ 371a para. 1 German Code of Civil Procedure (Zivilprozessordnung – ZPO)). For this purpose, it is initially necessary for the signing person to be identified by a trustworthy authority. It must then be ensured that the person identified in this way is the only one who can also sign as this person. This is regularly achieved by linking knowledge at the identified person (such as a password) and an object (such as an identification card) – the so-called two-factor authentication. Instead of the knowledge component, biometric features (such as a fingerprint) can also be used, for example.
If these requirements are transferred to the written form requirement (Schriftform), the qualified electronic signature already ensures in advance in technical terms that person A cannot make a declaration as (and on behalf of) person B; in the case of a written document, a graphological analysis is required in case of doubt.
In view of the complex technical requirements, the (qualified) electronic signature will only make things easier if it is used frequently. In any case, however, it must be checked that the legal requirements for replacing the written form (Schriftform) are also met for the specific application, e.g. in the case of declarations of termination (§ 623 BGB) and in the case of banking and collateral transactions (e.g. assumption of a guarantee, cf. § 766 p. 2 BGB).
The so-called text form (Textform) (§ 126b BGB) remains, which requires a legible declaration on a permanent data carrier that identifies the person making the declaration. In this case, there is no (verifiable) connection between the declared content and the person making the declaration. It can only be proven that the relevant declaration was made, but not with certainty who made it. If, for example, a dispute arises as to whether a shareholder actually declared his/her consent to a shareholder resolution by circulation via a short message service, only a consenting declaration can be proven. Whether the message was sent by the owner of the e-mail address or mobile phone number him/herself, for example, can be assumed according to a certain probability of life, but is not amenable to direct proof.
The explanations show that, depending on the use of technology, statutory or contractual written form requirements can be fulfilled.

Specific Use of Digital Solutions in Legal Transactions

Providers of digital signing software enable users to sign contracts – whether they were originally created electronically or are a scanned document – using an electronic signature. Documents that were originally created electronically exist, for example, when a Word document is converted into a PDF document. Depending on whether a qualified electronic signature is used or only a simple electronic signature, the text form) or even the written form (Schriftform) requirement is met. A specific application example is the conclusion of a loan agreement. The signature can thus be applied to a PDF document by means of a hand gesture on a tablet. Depending on the provider and solution package of the digital solution, the aforementioned link between the user and the signature is ensured by the complex technical precautions, so that a qualified electronic signature can exist, which in turn fulfills the written form (Schriftform) requirement.
In most cases, however, there is no legally secure link between the identified user of the software and the actual signatory, so that the requirements for a qualified electronic signature are not met. If this link is not established, a legal or contractually agreed written form (Schriftform) requirement can at best be fulfilled by using the corresponding software solution.

Particularities in Interactions with Public Administration

In practice, the public administration is very reluctant to recognize electronically created or signed documents, mainly for reasons of legal certainty. In practice, a case frequently arises at the commercial register in which the core issue is the format and form of a submitted shareholder resolution. This is because, in accordance with § 48 para. 2 GmbHG, shareholders’ resolutions can be passed without a formal requirement and thus without a qualified electronic signature. In this respect, a (simple) electronic signature is therefore sufficient.
If the subject matter of the resolution is one whose content must be filed with the commercial register (§ 39 para. 1 GmbHG), a distinction must be made between the substantive and procedural levels. The substantive level relates to the requirements of the GmbHG for a shareholders’ resolution with regard to its form. If, for example, documents are to be notarized (Beurkundung) or certified (Beglaubigung) and submitted, this form must be met. On the other hand, no special form is required for “regular” shareholder resolutions, such as the dismissal of a managing director. It must then be examined whether procedural law imposes more extensive or other requirements on the form of the resolution adopted and to be submitted.
Pursuant to § 39 para. 2 GmbHG, for example, the resolution on the dismissal of a managing director must be attached to the commercial register application in its original form or as a publicly notarized copy. An original copy presupposes a physically existing original document, as does a certified copy referring to that original document. In both cases, therefore, it is excluded that documents originally created electronically or merely signed in this way can be used. However, pursuant to § 8 para. 5 GmbHG in conjunction with sect. 12 para. 2 sentence 2 half-sentence 1 German Commercial Code (Handelsgesetzbuch – HGB), the document to be submitted (in this case the shareholders’ resolution) may be submitted electronically and in a machine-readable and searchable data format, with the transmission of an electronic record being sufficient in any event if an original copy is to be submitted. In turn, an electronic record exists when a document is created that can be permanently reproduced. It is not necessary that such a record is created on the basis of a physical document. It can therefore also be an originally electronically created document. The recording itself can also be a record of the event to be documented. This was most recently confirmed by the final decision of the 22nd Civil Senate of the Berlin Court of Appeal of 30 June 2022 (case no. 22 W 36/22) on an original electronic document signed via DocuSign.
The scepticism of the public administration towards technological progress is particularly evident in the above-mentioned proceedings in that the Registry Court stated that it had not been able to verify the authenticity of the declaring persons due to the form of the submitted resolution, which was originally created electronically. This is surprising insofar as the court is equally unable to do so in the case of declarations originally generated physically. Especially in the case of a scanned document, there is no verification approach for validating the identity of the allegedly declaring person with that of the person actually making the declaration. This is because, from a graphological point of view, it is always necessary for the original document and genuine specimen signatures to be available – which is never the case from the perspective of the commercial register.
There is also nothing to the contrary in the light of the principle of official investigation under register law (sect. 26 German Act on Proceedings in Family Matters and in Matters of Non-contentious Jurisdiction (Gesetz über das Verfahren in Familiensachen und in den Angelegenheiten der freiwilligen Gerichtsbarkeit – FamFG)), according to which the Registry Court can independently examine facts that are relevant to the decision. If there are no indications that the claimed identity differs from the actual identity, there is no reason for the Registry Court to carry out investigations. When the law on the electronic commercial register, on which § 12 HGB is based, was passed, the legislator did not consider it necessary for the authenticity of the signature to be checked by the Registry Court in such cases. Accordingly, a PDF document can also be submitted, provided that the responsible person (keeper of the minutes) is identifiable in it by being mentioned below the text (i.e. meeting the textform requirement).

(Civil) Procedural Significance

If electronically signed declarations are used in legal proceedings, another special particularity arises. If, for example, the text form is fulfilled by a simple electronic signature and a dispute arises later about the authenticity, the following risk remains: If the person who signed is no longer available, he or she can no longer provide information in court that he or she made the declaration in question. There is then no way of countering the objection of lack of authenticity.
However, the problem also exists if there is only a scan of an original document, the person who signed it is no longer available, and then the authenticity of the signature is disputed.
Finally, the eIDAS Regulation (Regulation (EU) No. 910/2014 of the European Parliament and of the European Council of 23 July 2014), which is relevant for digitization issues in legal transactions in the EU, is also of no help in this case. It does provide for a prohibition of discrimination with regard to electronic signatures (Art. 25 para. 1 eIDAS Regulation). According to this, their legal effect and admissibility as evidence in court proceedings may not be negated solely because they are only available in electronic form or do not meet the high requirements of a qualified electronic signature. In the constellation outlined, however, there is no such disadvantage due to the form of the evidence.
Accordingly, in cases where it is unclear whether the person signing the declaration will still be in accessible at a later date and there is a chance that a dispute will arise over the declaration, it is advisable either to use a qualified electronic signature or to make the corresponding declaration in writing.

Summary

Caution should be exercised when replacing classic signing methods with digital solutions, as there are various particularities depending on the constellation. A growing acceptance of digital solutions on the part of the administration can be observed and the plans to use electronic signatures should not be generally postponed due to initial resistance.