Rothenburg ob der Tauber, Germany

Highest Court Ruling Saves Costs for Shareholders’ Approval in a German Limited Liability Company (GmbH)

By Dr Angelika Baumhof and Christian Pflaeger, Jakoby Dr. Baumhof - Wirtschaftsprüfer Steuerberater Rechtsanwälte

For a long time, it was uncertain whether a notarised shareholders’ resolution of approval is required in the case of a German limited company (GmbH) selling all or substantially all of its assets. It was clear that a shareholders’ resolution of approval is required, but not its form. On 08 January 2019, the German Federal High Court of Justice (II ZR 364/18) ruled that the legal provision § 179a AktG (German Stock Corporation Act) does not apply by analogy to German limited companies (GmbHs). Section 179a AktG stipulates that the sale of the business of a German stock company requires a notarised resolution of the meeting of the stockholders with not less than a majority of three fourths, otherwise the transaction is null and void.

In the opinion of the Federal High Court of Justice, shareholders of a GmbH are not as vulnerable as stockholders of a stock company. Shareholders of a GmbH could control the management more effective than stockholders of a stock company.

The decision of the Federal High Court of Justice states that an agreement about the sale of all or substantially all assets of a GmbH requires a shareholders’ resolution of approval, but this resolution needs not to be notarised.

But still, be careful! A simple shareholders’ resolution with a majority of three fourths on the vendor’s side is still necessary for an asset deal. Otherwise, the management can face claims for damages against them by objecting shareholders. Furthermore, in case the buyer has knowledge of the missing shareholders’ formal approval by a resolution, he may not derive any rights under the contract. The court even stipulated a responsibility of the buyer to inquire into the existence of a shareholders’ resolution. So always make sure that a shareholders’ resolution is taken with the necessary majority, even if you are on the buyer’s side.


Dr Angelika Baumhof

Dr Angelika Baumhof

GGI member firm
Jakoby Dr. Baumhof - Wirtschaftsprüfer Steuerberater Rechtsanwälte
Advisory, Auditing and Accounting, Corporate Finance, Law Firm Services, Tax
Rothenburg o.d.T., Ebersberg, Germany
T: +49 9861 9405 0
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: www.jakoby-baumhof.de

Jakoby Dr. Baumhof - Wirtschaftsprüfer Steuerberater Rechtsanwälte is a medium-size, interdisciplinary company located in the south of Germany, with offices in Rothenburg ob der Tauber, located in Northern Bavaria, and Ebersberg, near Munich.

Dr Angelika Baumhof started her career as a judge and then as a prosecutor in Munich, before she became a partner at Jakoby Dr. Baumhof in 1996. Her main field of expertise is consulting in all fields of commercial and private law, but she also practices litigation. She speaks German, English and French.
Christian Pflaeger

Christian Pflaeger

GGI member firm
Jakoby Dr. Baumhof - Wirtschaftsprüfer Steuerberater Rechtsanwälte
Advisory, Auditing and Accounting, Corporate Finance, Law Firm Services, Tax
Rothenburg o.d.T., Ebersberg, Germany
T: +49 9861 9405 0
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: www.jakoby-baumhof.de

Christian Pflaeger is a certified specialist attorney for commercial and corporate law and holds a degree as an economic lawyer. He also practices as a litigator in civil legal disputes. He speaks German, English, and French.


Published: Debt Collection, Restructuring & Insolvency Newsletter, No. 11, Autumn 2019 l Foto: xbrchx - stock.adobe.com

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