{"id":6854,"date":"2022-04-04T11:30:00","date_gmt":"2022-04-04T09:30:00","guid":{"rendered":"https:\/\/honert.de\/?p=6854"},"modified":"2022-04-04T12:24:21","modified_gmt":"2022-04-04T10:24:21","slug":"no-limitation-of-the-formation-expenses-to-10-of-the-share-capital-in-the-case-of-other-free-assets-of-a-gmbh","status":"publish","type":"post","link":"https:\/\/honert.de\/en\/no-limitation-of-the-formation-expenses-to-10-of-the-share-capital-in-the-case-of-other-free-assets-of-a-gmbh\/","title":{"rendered":"NO LIMITATION OF THE FORMATION EXPENSES TO 10% OF THE SHARE CAPITAL IN THE CASE OF OTHER FREE ASSETS OF A GMBH"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-1rjb8y-f134e1a731d8423250123d7f8b5b60dc\">\n.avia-section.av-1rjb8y-f134e1a731d8423250123d7f8b5b60dc{\nbackground-repeat:no-repeat;\nbackground-image:url(https:\/\/honert.de\/wp-content\/uploads\/3629.jpg);\nbackground-position:0% 0%;\nbackground-attachment:scroll;\n}\n<\/style>\n<div id='av_section_1'  class='avia-section av-1rjb8y-f134e1a731d8423250123d7f8b5b60dc main_color avia-section-default avia-no-shadow  avia-builder-el-0  el_before_av_section  avia-builder-el-first  hide_on_print avia-full-stretch avia-bg-style-scroll av-minimum-height av-minimum-height-40 av-height-40  container_wrap sidebar_right'  data-section-bg-repeat='stretch' data-av_minimum_height_pc='40' data-av_min_height_opt='40'><div class='container av-section-cont-open' ><main  role=\"main\" itemprop=\"mainContentOfPage\"  class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-6854'><div class='entry-content-wrapper clearfix'>\n<\/div><\/div><\/main><!-- close content main element --><\/div><\/div><div id='av_section_2'  class='avia-section av-1ma9oy-e0cb684a3f9e3643f68bd4585e14541c main_color avia-section-default avia-no-shadow  avia-builder-el-1  el_after_av_section  avia-builder-el-last  avia-bg-style-scroll container_wrap sidebar_right'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-6854'><div class='entry-content-wrapper clearfix'>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-ekgw2q-6bb39b015031711eeac19bc0e256309a\">\n.flex_column.av-ekgw2q-6bb39b015031711eeac19bc0e256309a{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-ekgw2q-6bb39b015031711eeac19bc0e256309a av_two_third  avia-builder-el-2  el_before_av_two_third  avia-builder-el-first  first flex_column_div av-zero-column-padding  '     ><style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-l1kk4ha4-ac6392be4979e3786214aba2b53b6322\">\n#top .av-special-heading.av-l1kk4ha4-ac6392be4979e3786214aba2b53b6322{\npadding-bottom:10px;\n}\nbody .av-special-heading.av-l1kk4ha4-ac6392be4979e3786214aba2b53b6322 .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n.av-special-heading.av-l1kk4ha4-ac6392be4979e3786214aba2b53b6322 .av-subheading{\nfont-size:15px;\n}\n<\/style>\n<div  class='av-special-heading av-l1kk4ha4-ac6392be4979e3786214aba2b53b6322 av-special-heading-h1 blockquote modern-quote  avia-builder-el-3  avia-builder-el-no-sibling '><div class='av-subheading av-subheading_above'>4. April 2022\n<\/div><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >NO LIMITATION OF THE FORMATION EXPENSES TO 10% OF THE SHARE CAPITAL IN THE CASE OF OTHER FREE ASSETS OF A GMBH <\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-19fiqq-ba3810936a9a2cc49912fe358f9d307b\">\n.flex_column.av-19fiqq-ba3810936a9a2cc49912fe358f9d307b{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-19fiqq-ba3810936a9a2cc49912fe358f9d307b av_two_third  avia-builder-el-4  el_after_av_two_third  el_before_av_two_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-l1kk50m5-95ddc4cbf5d0afb50e3ce00b5311558e '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><p><strong>In its decision of 26 October 2021, the Berlin Appellate Court ruled that the assumption of the formation expenses by a company is not limited in each case to an amount equivalent to 10% of the share capital. A takeover with a higher percentage is possible in particular if the company has free capital available in the amount of a multiple of the share capital.<\/strong><!--more--><\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-15cwyq-ec968b1f22946cb5441983ca4ba7f6c0\">\n.flex_column.av-15cwyq-ec968b1f22946cb5441983ca4ba7f6c0{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-15cwyq-ec968b1f22946cb5441983ca4ba7f6c0 av_two_third  avia-builder-el-6  el_after_av_two_third  el_before_av_one_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-l1kk750l-a6aa1feec0951905edc377872c24741b '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><h2>I. Introduction<\/h2>\n<p>Company agreements regularly provide for the company to bear its formation expenses, i.e. e.g. consulting, notarization and registration costs up to a certain amount. For a joint stock corporation, a specific determination of the formation costs is prescribed in the statutes pursuant to \u00a7 26 para. 2 German Stock Corporation Act (<em>Aktiengesetz <\/em>&#8211; AktG). This provision &#8211; which is partly applicable similarly for other types of companies &#8211; is the starting point for the discussion on the permissible level of cost absorption. The focus here is on the subsequent question of whether the principle of adequacy (<em>Prinzip der Angemessenheit<\/em>) has also been observed in the respective individual case.<\/p>\n<h2>II. Scope of Application and Requirements of \u00a7 26 para. 2 AktG<\/h2>\n<p>\u00a7 26 para. 2 AktG is directly applicable only to joint stock corporations, but also to partnership limited by shares (<em>Kommanditgesellschaft auf Aktien<\/em> \u2013 KGaA) by reference to \u00a7 278 AktG and, according to generally accepted case law, also to limited liability companies (<em>Gesellschaft mit beschr\u00e4nkter Haftung<\/em> \u2013 GmbH\/<em>Unternehmergesellschaft<\/em> \u2013 UG) on an analogous basis. The obligation to determine the formation expenses is a provision protecting creditors and shareholders, as it ensures that the extent to which the share capital is burdened in advance by formation expenses is transparent to them. This largely limits the meaning of \u00a7 26 para. 2 AktG in terms of corporate law; the law does not explicitly provide for an upper limit for the permissible assumption of formation expenses. However, the assumption of formation costs by the company is also recognized for tax purposes only if the requirements of company law are met, otherwise this constitutes a hidden distribution of profits.<br \/>\nNevertheless, the determination in the statutes forms the starting point for the subsequent examination of adequacy.<br \/>\nFor the assumption to be permissible, it is essential that the costs or expenses are necessary and reasonable in terms of their nature and extent.<\/p>\n<h2>III. Previous case law on permissible assumption<\/h2>\n<p>When registering a company, the registration court shall examine the amount of the assumed formation costs for their adequacy. For the assessment, case law often considers the formation expenses in relation to the share capital. The assumption of formation costs up to the amount of 10% of the share capital is generally not objected to. However, a formation expense of 100% was also deemed permissible for a limited liability entrepreneurial company (UG), in particular because the mandatory name of the company as a UG and the suffix &#8220;haftungsbeschr\u00e4nkt&#8221; (limited liability), which must be used in accordance with \u00a7 5a para. 1 German Limited Liability Companies Act (<em>Gesetz betreffend die Gesellschaften mit beschr\u00e4nkter Haftung<\/em> &#8211; GmbHG), draw the attention of creditors to the risks associated with a UG.<\/p>\n<h2>IV. Decision of the Appellate Court (KG, decision of 26 October 2021 &#8211; file no.: 22 W 44\/21, final)<\/h2>\n<h5>1. Facts of the case (shortened)<\/h5>\n<p>The limited partners of a GmbH &#038; Co.KG (limited partnership with a limited liability company as general partner) registered the change of legal form on the basis of a notarized conversion resolution into a GmbH. All the information required for registration was included. Among other things, the application was also accompanied by a calculation of the formation costs.<br \/>\nIn a letter dated 11 January 2021, the Charlottenburg Local Court objected to the provision in Section 15 of the partnership agreement, which provided for the assumption of formation costs in the amount of EUR 10,000. Following a letter from the notary public requesting an appealable decision, the Charlottenburg Local Court rejected the application in a decision dated 10 February 2021. The Charlottenburg Local Court did not uphold the appeal and referred the decision to the Senate for a ruling.<\/p>\n<h5>2. Decision and justification<\/h5>\n<p>This decision by the Senate was also based on the adequacy test set out in \u00a7 26 para. 2 AktG. Contrary to the view of the Charlottenburg Local Court, however, there is no flat-rate limit of 10% of the share capital, as this is neither prescribed by law nor otherwise mandatory. In particular, the protection of creditors inherent in \u00a7 26 para. 2 AktG does not require such a restriction. The protection of third parties within the meaning of \u00a7 26 para. 2 AktG is ensured by disclosure. Necessary limitations when overstated or undocumented costs are charged do not justify a rigid limit.<br \/>\nIn some cases, such as in the present case with a higher company value of the KG, higher notarial costs are compulsorily incurred in the change of legal form, \u00a7 108 para. 3 sentence 1 German Law on Court and Notarial Costs (<em>Gerichts- und Notarkostengesetz<\/em> &#8211; GNotKG), compared to the case where the value of the share capital would be decisive. However, the determination of the still admissible formation costs in such cases cannot be made on the basis of the share capital, since there is no impairment of third parties even through a higher assumption. Based on the existing assets, it is ensured that there is no underfunding to the detriment of creditors even after deduction of liabilities.<\/p>\n<h5>3. Consequences for the practice<\/h5>\n<p>The 10% rule will continue to be used as a benchmark in case law. In the case of the formation of a new GmbH, this is also generally the case, as this ensures that the interests of the creditors are adequately protected. Nevertheless, the present decision clearly shows that a rigid adherence to the 10% limit is not applicable and that the individual case must always be considered. Particularly in the case of conversions of valuable companies, significantly more than 10% of the share capital can therefore also be admissibly assumed by the company.<\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-9whfqq-cd67a7bbd3f5723d5f4297373822a1f0\">\n.flex_column.av-9whfqq-cd67a7bbd3f5723d5f4297373822a1f0{\nborder-radius:0px 0px 0px 0px;\npadding:7px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-9whfqq-cd67a7bbd3f5723d5f4297373822a1f0 av_one_third  avia-builder-el-8  el_after_av_two_third  avia-builder-el-last  sy-only-desktop hide_on_print flex_column_div  column-top-margin'     ><p><div  class='avia-builder-widget-area clearfix  avia-builder-el-9  el_before_av_textblock  avia-builder-el-first '><section id=\"categories-3\" class=\"widget clearfix widget_categories\"><h3 class=\"widgettitle\">Newsletter issues<\/h3>\n\t\t\t<ul>\n\t\t\t\t\t<li class=\"cat-item cat-item-272\"><a 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onclick=\"window.print();return false\">Print<\/a><br \/>\n\n\n\n\t<div class=\"dkpdf-button-container\" style=\" text-align:left \">\n\n\t\t<a class=\"dkpdf-button\" href=\"\/en\/wp-json\/wp\/v2\/posts\/6854?pdf=6854\" target=\"_blank\"><span class=\"dkpdf-button-icon\"><i class=\"fa fa-file-pdf-o\"><\/i><\/span> Download (PDF)<\/a>\n\n\t<\/div>\n\n\n\n\n\n<\/p>\n<\/div><\/section><\/p><\/div><\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='after_section_2'  class='main_color av_default_container_wrap container_wrap sidebar_right'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-6854'><div class='entry-content-wrapper clearfix'>\n","protected":false},"excerpt":{"rendered":"<p>In its decision of 26 October 2021, the Berlin Appellate Court ruled that the assumption of the formation expenses by a company is not limited in each case to an amount equivalent to 10% of the share capital. A takeover with a higher percentage is possible in particular if the company has free capital available in the amount of a multiple of the share capital.<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"mc4wp_mailchimp_campaign":[],"footnotes":""},"categories":[177],"tags":[],"class_list":["post-6854","post","type-post","status-publish","format-standard","hentry","category-2022-q1-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts\/6854","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/comments?post=6854"}],"version-history":[{"count":12,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts\/6854\/revisions"}],"predecessor-version":[{"id":6868,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts\/6854\/revisions\/6868"}],"wp:attachment":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/media?parent=6854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/categories?post=6854"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/tags?post=6854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}