Corporate Law

The following list is not final. We just want to give you a brief and concise first impression of our work. Please form your own opinion using our strictly anonymous case list:
Corporate Law Case List

In practice, German company law is characterized above all by strong networking with other areas of law. This requires that a specialized partner at your side is familiar with both corporate law and overarching legal areas. This is the only way to ensure that potential problems can be pointed out at an early stage. The course for a solid construct of a company is regularly laid in the pre-foundation phase of companies. The first step is the choice of legal form; The following things should be considered as examples:

Choice of legal form:

Reason:
- joint cooperation (personalistic oriented)
- asset management
- public company
- project-related; working group
- silent participations (silent companies, trust models)
- equity investments
- Freelance partnership (doctors, dentists, lawyers, etc.)

Structure and legal consequences:
- Formalities (Do I have to go to the notary?; commercial register entries)
- Management and supervision/participation
- taxation
- flexibility
- Opinion formation process (voting ratio)
- disclosure requirements
- Restriction of transferability of shares; advance rights
- Design of profit distribution / withdrawal rights
- Representation and management of the company
- Contributions (money and contributions in kind)/share capital/liability and compulsory contributions), obligation to make contributions, obligations to make additional payments
- Control mechanisms
- Exclusion of shareholders/dispute/compensation/liquidation
- Change of members, succession
- Duty of loyalty, restrictions and prohibitions on competition
- Accounting (annual accounts, balance sheets, income statement, etc.)

Organizational right:
- Separation of internal and external relationships
- Management (joint, sole management)
- Representation of the company (individual representation, joint representation), self-contracting (§ 181 BGB)
- Authorized officers, authorized representatives
- General meeting/ shareholder resolutions (unanimity, simple majorities, qualified majorities)
- Administrative rights and property rights of the partners
- Information rights
- Arbitration Agreements

It is therefore short-sighted to skimp on qualified legal advice.

Partnerships (GbR, OHG, KG)

Many societies are structured in a personalistic way. As long as you understand each other, working together is often goal-oriented and fruitful. In the event of a dispute, however, the company and work are regularly paralyzed, assets threaten to be broken up and the dispute becomes increasingly deep. If you don't react quickly and with foresight, you will often be left behind. This begins with the realization that if you no longer understand each other, it is usually better to separate in an orderly and economically sensible manner.

Resignation of the shareholder:
- voluntary resignation: termination; impermissible restriction of the right of termination (§ 723 Para. 3 BGB); exit agreement; Transfer of Shares
-involuntary (forced) resignation: exclusion; inadmissible provisions in the articles of association (unfair and immoral severance clauses); important reason; ultimate means; continuation clauses; unlawful termination clauses; interim disposal
- Action for exclusion (§ 140 HGB)
- Termination by third parties (private creditors of the shareholder)
- Inheritance: continuation clauses, succession clauses (inheritance law, legal transactions); entry clauses
- accumulation; takeover rights
- entitlement to compensation: assessment of the entitlement; breakdown/severance balance sheet; book value clauses, compensation in kind; Equity items (retained earnings, reserves, etc.); goodwill; hidden reserves
- freelance law firms: real division; goodwill; ideal practical values;
- discharge of debt; release from common liabilities; release from liability
- follow-up liability; Limitation of subsequent liability (publicity; disclosure requirements); legacy liabilities; continuing obligations; new liabilities
- tax issue: capital gains; Liability/Loss Sharing Exemption as a Taxable Capital Gain; valuation of intangible assets; Earned Value Method

Dissolution/ liquidation of the company:
- dissolution resolution; Action for dissolution (§ 133 HGB); passage of time; Insolvency (corporate insolvency/ shareholder insolvency); death of a shareholder; Termination by a shareholder
- full termination; liquidation company; orderly liquidation; notification of dissolution
- Liquidation of company assets; Company receivables, settlement of liabilities; if necessary, the shareholders are obliged to make additional payments; utilization of company assets; refund deposits; distribution of remaining assets; opening liquidation balance sheet; Liquidation Closing Balance Sheet
- Sale of the company to a third party
- Tax consideration: Determination of profit from sale or abandonment; reversal of reserves; sale proceeds; Transfer of assets from business assets (appraisal fair value); assumption of liabilities by purchaser; real division

Profit distribution / profit sharing:
- Claim for distribution of profits
- Step-by-step lawsuit: information, accountability and distribution of profits
- Taking withdrawals into account
- profit distribution key: per capita; provisions in the articles of association
- Social loyalty

Change of legal form/conversion
- Corporation into partnership: conversion resolution; Conversion report and cash compensation requirement; registration and registration; Accounting for the original legal entity and the new legal entity; Determination and taxation of the takeover result
- Partnership into a corporation: conversion resolution (resolution and capital raising); Conversion report and cash compensation requirement; registration and registration; accounting practice; Determination and taxation of contribution profits

Company in crisis (restructuring/ insolvency)
- insolvency; Over-indebtedness (balance sheet and insolvency law over-indebtedness)
- Reorganization concepts: capital increases; shareholder loans, subordination agreements; Waiver of claims (possibly against debtor warrant)
- fundamentally no obligation to file for insolvency (exception: capitalist partnerships, e.g. GmbH & Co. KG)
- accessory liability of the shareholders (§ 128 HGB; analogous to GbR); limited liability of the limited partner; provision of the detention deposit; Capital preservation analogous to §§30,31 GmbHG at GmbH & Co.KG; Liability of shareholders for taxes (§ 191 AO)
- Liability of managing directors: for outstanding taxes (§§ 34, 35 AO); Tortious liability, including for employee shares in statutory social security (§ 823 Para. 2 BGB in conjunction with § 266a StGB)
- Special feature of the capitalistically structured partnership (e.g. GmbH & Co.KG): insolvency delay and causal liability of the managing director; Obligation to reimburse prohibited payments §§ 177a, 130a HGB new version); capital maintenance (corresponding application §§ 30, 31 GmbHG); Equity replacement law (revised insolvency challenge according to § 135 InsO on shareholder loans, § 39 Para. 1 No. 4 InsO)

Profit Determination and Taxation
- Taxable person in a partnership: trade tax, sales tax, tax declaration obligation
- taxable person shareholder: income tax, share in the overall result of the company, company subject of the determination of the profit; Distribution to shareholders, profit sharing, profit distribution key; Addition of withdrawals; settlement deposits; Loss Compensation Opportunities; limited loss compensation with limited liability (limited partner), negative capital accounts
- Capitalization taxation: tax privileges for capitalized profits
- Income determination by income surplus calculation; Inflow/outflow principle
- Operating expenses, business reasons, typical costs of private living (private debt interest, additional expenses for meals, private use of motor vehicles, legal costs of arrest, etc.)

Arbitration Agreement/Arbitration Clause/Arbitration
- Arbitration Claim
- Asserting arbitration objections in due process before state courts
- Claim for advance payment for arbitration before ordinary courts
- Arbitrator appointment procedure at the Higher Regional Court

Corporations (GmbH, small and medium-sized AG):

Corporate law is broad and highly complex. This is particularly evident in the example of the limited liability company. The legal situation there requires compliance with strict formalities - the situation is no different in the case of a joint-stock company; This starts with questions about the implementation of a shareholders' meeting (e.g. proper convocation), goes through the (mandatory) judicial challenge of illegal shareholder resolutions and ends with questions of effective business share transfers. The liability of the managing director is also central in GmbH law. While the law provides for extensive liability of the shareholders in partnerships, the central liability figure in the GmbH is its managing director. Sensitive liability regulations are provided for here in the law, which make the managing director responsible towards the company, but sometimes also towards company creditors (tax authorities). There are particularly high liability risks for the managing director in the event of insolvency (overindebtedness and/or insolvency) of the company. Anyone who does not react appropriately and promptly here will very quickly find themselves faced with horrendous civil liability and criminal liability. At that point at the latest, professional legal support is essential (see also the main areas of insolvency/restructuring law, tax law and commercial criminal law).

Our fields of activity can almost always be found - directly or at least marginally - in the following categories:

Shareholders meetings:
- Proper convocation/ summons: not at the wrong time; regularly at the registered office of the company; Articles of Association; compliance with the loading deadline; form of convocation
- Accompaniment/implementation/logging
- Right to be present, representation (regularly by persons sworn to professional secrecy), right of third parties to participate
- Passing resolutions: voting, weighting of votes, adoption of resolutions
- Agenda items
- Compliance with majority requirements; quorum
- admissible/inadmissible binding of votes

Faulty shareholder resolutions:
- In particular, formal errors: when convening the general meeting, holding the meeting, passing resolutions, violation of participation rights, incorrect weighting of votes, non-observance of voting bans, etc.
- other errors: non-existence of confiscation requirements; no grounds for exclusion; non-observance of qualified majorities, unreasonable executive remuneration; detection of erroneous annual accounts; incorrect use of results, etc.; Authorization of special representatives for active and passive processes
- Action for a declaration of nullity against void shareholder resolution
- Action for rescission against unlawful shareholder resolutions
- interim legal protection: prohibition of decision-making (problem of intervention in opinion-making); prohibition of implementation; Prohibition of slanderous factual allegations
- positive decision declaratory action in the event of refusal to adopt a resolution and/or illegal adoption of a resolution (problem of intervention in the opinion-forming process)

Contentious shareholder dispute
- minority shareholders; Sutz by unanimity clauses; protection by qualified majority clauses; Assertion by an action for a declaration of nullity/avoidance
- Disputes about the use of profits; Drying out of the minority shareholder through accumulation of profits (profit carried forward, retained earnings, formation of reserves); proper balancing of interests
- Enforcement of profit claims (profit receipt, determination of the annual result, determination of the annual financial statements, annual surplus, resolutions on the appropriation of profits and profits)
- misappropriation of company assets; arrest and repatriation of embezzled company assets; Company Funeral and Cold Liquidation (What to do?)
- Cancellation of shares for good cause; exclusion of shareholders; What to do?: temporary legal protection against the creation of a fait accompli, an action for a declaration of nullity/avoidance
- Dismissal of managing partner as managing director for good cause; Objective reason: disregard for the diligence of a prudent businessman
- positive decision declaratory action in case of refusal;
- Appropriation of profits in the Articles of Association; Deviation from the legal model (back to the full payout requirement); Sustained thwarting of profit distribution;
- Compensation for damages due to unlawful dismissal; unlawful transfer of shares; unlawful de facto transfer of business operations to competing companies; unlawful bringing about of the impossibility of distributing profits
- unlawful poaching of staff and customers; Continued employment in a newly founded competitor company
- Access and information rights; legal enforcement against company;
- Authorization of special representatives for active and passive processes of the company; alternative assertion of claims by the company (actio pro socio)

Managing director liability:
- Attack: for company burial, cold liquidation; Misappropriation of company assets, unauthorized withdrawals by the managing director (salary payments, granting of loans, etc.); Breaches of duty from the employment contract; breach of organizational duties; Failure to exercise due diligence as a prudent businessman (Section 43 GmbHG); If applicable, liability for penetration due to intervention that destroys existence (§826 BGB; principle now action against company and then attachment and transfer of claims against managing directors)
- Defense: against liability for delay in insolvency (in particular § 64 GmbHG); Violation of mandatory capital preservation rules; balance sheet (deficit not covered by equity) and insolvency law overindebtedness (taking into account hidden reserves, qualified subordination, waiver against debtor warrants, etc.); insolvency; obligation to file for insolvency;
- Criminal liability: tax evasion (§ 370 AO); withholding and misappropriation of wages (§ 266a StGB); conflict of duties; Criminal crook, preferential treatment for creditors and debtors (§§ 283 ff. StGB)
- proper preparation of annual accounts and publication; violation of accounting truth; Proper accounting principles; Fines and penal provisions according to §§ 331 ff. HGB
- Liability towards the tax authorities in insolvency: action against notice of liability; Quota loss for sales tax; Problems with the payment of income tax (duty to reduce wage payments in the crisis); Collision of duties 

Capital preservation/contribution
- Demand for capital contributions, violation or payment or similar against mandatory capital maintenance regulations (§§ 30, 31 GmbHG)
- Enforcement of shareholder liabilities; lawsuits against shareholders for the company; Title, attachment and realization of shares

The other way round:
- Assertion of shareholder claims due for repayment against the company, lawsuit and title; Third-party insolvency application due to non-payment and unsuccessful seizure
- (compulsory) caduation:

• Loss of business share; Consideration of capital figures
• Confiscation for good cause; regulation in the articles of association
• Ultima ratio (last resort)
• Legal challenge; Annulment Action
• Compliance with the legal period
• Loss of membership rights (right to participate, right to vote, etc.)
• Severance pay: Articles of Association; Compensation not a condition for confiscation according to the new case law of the Federal Court of Justice

- Purchase/ sale/ transfer of share:

• Compulsory form (notarial certification; possibly healing);
• Restriction of transferability of shares (approval requirement of the company, shareholder)
• Right of first refusal for shareholders (prevention of influence or intrusion by third parties)
• Right to profit or reassignment of profit claims from previous financial years; Compensation for damages due to failure to receive
• profits from previous years
• Valuation of the business share (material value, good will, earnings value, etc.)
• Trust agreements on shares: compliance with form, condition precedent transfer of shares, approval requirements
• Defending Society Against Tax Treasury
• Transactions with a foreign connection (problem with payment of sales tax abroad)
• Problem of recognition of cash transactions abroad (Spain, Greece, Italy)
• Disputes with customs authorities, tax offices and tax investigators
• Allegation of hidden profit distribution
• Special taxation due to the type of business (e.g. spirits tax, entertainment tax)
• Recognition of Business Expenses
• Assistance in the tax audit; countering an estimate
• actual communication with tax authorities
• opposition procedure
• complaint before the finance court; interim legal protection: suspension of enforcement
• defense against arrest; Action against notices of liability

Arbitration Clause/Arbitration Agreement

• Arbitrability also of actions for a declaration of nullity/avoidance
• Temporary legal protection before the state courts despite arbitration clause and levying of an arbitration objection (effective legal protection; avoidance of legal nullification by creating a fait accompli)