Corporate law. M&A

In many law firms, corporate law is at the heart of the legal advice they provide. This is no different at Themis.

We advise and represent companies and entrepreneurs in the following areas:

  • Corporate and commercial law, also for non-profit companies and institutions
  • Stock corporation law
  • Company acquisition, company succession
  • Mergers and transformations
  • Ways out of the crisis: reorganisation and restructuring
  • Out-of-court dispute resolution (mediation, conciliation and arbitration)
  • Holding office as a member of the supervisory board or advisory board
  • Coaching of executive boards and managing directors, supervisory boards and advisory boards
  • Tax and legal representation in criminal tax law
  • Representation before the social courts in matters of social security law as an employer
  • Family law, divorce and alimony law
  • Succession, inheritance and gift law

Corporate law is the logical parenthesis and the heading of many of our clients' concerns.

Our experts 
for corporate law

Specialist information / FAQ

Judgements, advice and recommendations for shareholders and managing directors.

Several amendments to insolvency law are intended to create better conditions for successful corporate restructuring in insolvency proceedings.

Many countries have always had an insolvency culture in which the preservation of the ailing company is in the foreground. We are familiar, for example, with the American "Chapter 11" regulation, which has enabled numerous companies there to make a fresh start. In Germany, on the other hand, insolvency proceedings have so far mostly had a liquidation character - as many creditor claims as possible are still to be satisfied from the existing residuals.

A major step towards preserving insolvency proceedings, in which the focus is on restructuring the ailing company, is now to be taken by the Act to Further Facilitate the Restructuring of Companies (ESUG), which essentially came into force on 1 March 2012. The changes to the Insolvency Code contained therein strengthen both the creditor side and the debtor. The law contains four important changes:

Protective shield proceedings: In the event of imminent insolvency or over-indebtedness, a debtor now has the opportunity to draw up a restructuring concept within three months in a type of protective shield procedure under the supervision of a provisional administrator, which can then be implemented as an insolvency plan. The court is not only supposed to appoint the administrator proposed by the debtor as a provisional administrator as a rule, on application the court is also obliged to prohibit or temporarily suspend compulsory enforcement against the debtor. In addition, it may neither appoint a provisional insolvency administrator in protective shield proceedings nor restrict the debtor's power of disposal over his assets.

Expansion and streamlining of the planning process: Within the framework of the plan procedure, claims of creditors can in future also be converted into company shares as a restructuring instrument ("debt-equity swap"). The integration of this instrument into the insolvency code improves the chances of restructuring, as resistance from existing shareholders can be overcome. By moderately limiting the legal remedies against the plan confirmation, individual creditors should no longer be able to prevent the plan from taking effect in an abusive manner.

Stronger creditor autonomy: In future, in insolvency proceedings concerning companies whose operations have not yet ceased and which are of a certain size and thus of a certain economic importance (measured by their turnover, number of employees and annual balance sheet total), the court will be obliged to convene a preliminary creditors' committee. This committee has an important say in the selection of the insolvency administrator and the ordering of self-administration. If the creditors' committee is unanimously in favour of ordering self-administration, the court is to be bound by this. The preliminary creditors' committee will also be involved in the selection and appointment of the insolvency administrator. However, the participation of the creditors is not only brought forward in time. Under certain circumstances, the committee's specifications on the person of the administrator are to be binding on the judge. If all members agree on an administrator, the court will only be able to reject the nominee if he is obviously unsuitable.

Protection against enforcement after termination of proceedings: In order to avoid claims that were not filed in the insolvency proceedings and are only asserted after the conclusion of the plan proceedings subsequently disrupting the financial planning, the debtor will in future have the possibility of obtaining enforcement protection from the insolvency court in the event of enforcement attempts after the termination of the proceedings if the asserted claim jeopardises the implementation of the insolvency plan. In addition, the limitation periods for late claims will be shortened: claims that were not filed by the voting date and were therefore not to be expected will in future become time-barred in one year.

The ESUG with these four changes is only the first stage of a three-stage plan to reform insolvency law. In February, the Federal Ministry of Justice already presented the draft bill of an "Act to shorten the residual debt discharge proceedings, to strengthen creditors' rights and to make licences insolvency-proof". This second stage primarily brings improvements in consumer insolvency proceedings, but also affects companies in one respect. Namely, licensees are to be given the possibility to continue using the licence even in the insolvency of the licensor.

Even a different agreement on the place of jurisdiction does not change the fact that disputes between shareholders, the company and its organs in the case of a limited company must be settled before the English courts.

A Limited may have its advantages, but it is still a British legal form. It may have its administrative seat in Germany, but the place of incorporation is always in the UK, and according to the EU Regulation on Jurisdiction, this is decisive for disputes between shareholders or between shareholders and the company or its organs. English courts therefore have jurisdiction for such disputes. This does not change even if the partnership agreement declares German courts to have jurisdiction for such disputes. The Federal Court of Justice considers such an agreement on jurisdiction to be invalid on the basis of the EU Regulation.

The Federal Supreme Court and the Federal Fiscal Court have issued some interesting rulings on the capital contribution of GmbHs and UGs.

Problems with the capital contribution of a corporation typically arise twice - at the beginning and at the end of the company's life. At the beginning, the question arises as to the form and amount of the capital contribution, and when the insolvency administrator is at the end, he is interested in whether the capital contribution has also been paid in full.

The latter is also of interest to the tax office when it comes to proving the acquisition costs resulting from the payment. The Federal Fiscal Court has now ruled that it is somewhat unworldly for the tax office to still insist on a payment receipt as proof of the payment 20 years after the registration of the GmbH. Instead, all indications are to be examined as part of an overall assessment. However, the ruling is no reason not to keep the payment receipt meticulously and indefinitely when setting up a new company, because in the event of insolvency, a lot of trouble can be avoided with solid proof.

The Federal Supreme Court, on the other hand, dealt with the new formation of corporations - more precisely, with the ban on contributions in kind for mini-GmbHs, the so-called Unternehmergesellschaften (UGs). In the first ruling, the BGH decided that the ban on contributions in kind does not apply to an Unternehmergesellschaft if the minimum share capital of a GmbH is reached through the contribution in kind. The registration court must therefore accept a contribution in kind in this case and enter it in the commercial register. However, the transition to a fully-fledged GmbH only takes place with this entry, so that until then the special rules for the Unternehmergesellschaft continue to apply despite the contribution.

In a second decision, the Federal Supreme Court clarified that the new formation of an entrepreneurial company through a spin-off from a GmbH is not permissible. According to the legal requirements, such a spin-off must be a formation in kind, for which, among other things, a report on the formation in kind is required. Thus, the spin-off would violate the ban on contributions in kind for the Unternehmergesellschaft.

Because foreign company forms are excluded from the formation of a tax group, the EU Commission is demanding changes in German tax law.

In September, the EU Commission formally requested Germany to change its rules on fiscal unity. A company founded under the company law of another member state with its statutory seat abroad and management in Germany cannot form a tax group, although it is fully liable to tax in Germany. The Commission sees this as discrimination against domestic competitors and thus an impairment of the freedom of establishment for companies in Germany.

The settlement claim of a withdrawing BGB shareholder does not only become due with the preparation of a settlement balance sheet.

As soon as the shareholder of a civil law partnership leaves, a compensation claim arises against the partnership or, in the case of its over-indebtedness, also against the departing shareholder. According to the judges of the Federal Supreme Court, the due date of this claim does not depend on the preparation of a so-called settlement balance sheet. Rather, unless the articles of association provide otherwise, the claim becomes due immediately when it arises, i.e. at the time of the withdrawal, which is also when the limitation period begins to run.

Even a majority shareholder-director can, under certain conditions, benefit from the partial retirement regulations.

Managing directors of limited liability companies are also entitled to partial retirement, according to the Social Court of Düsseldorf: If the managing director of a limited liability company with sole power of representation holds more than 50 % of the share capital, but is effectively bound in trust to his wife, he can be a dependent employee of the limited liability company. Then, subject to the fulfilment of further requirements, he can belong to the beneficiary group of the Partial Retirement Act and claim corresponding benefits.

Small amount, big effect: An incorrect expense report justifies the termination without notice of a GmbH managing director.

Even a minor swindle justifies the termination without notice of a GmbH managing director. In one case, which had to be decided by the Higher Regional Court of Celle, the managing director had had 205 euros reimbursed for the purchase of an office chair by means of a replacement receipt, although the actual purchase price had only been 30 euros.

The additional duties of the notary to cooperate since the GmbH reform mean that only assignments before German notaries are absolutely legally secure.

Until now, a Swiss notary could also certify the assignment of GmbH shares, provided that the other formal requirements were met. However, since the reform of GmbH law, the notary must also inform the registry court of the change in the shareholder structure - a duty that inevitably only applies to German notaries - the Frankfurt Regional Court doubts that even now a foreign notary can effectively notarise an assignment. To be on the safe side, an assignment should therefore only be notarised by German notaries.

Members of voluntary supervisory boards must also perform their supervisory duties conscientiously.

The Brandenburg Higher Regional Court has impressively proven that being a supervisory board also means exercising supervision: The judges sentenced the members of a supervisory board to pay damages totalling over one million euros. For months, they had not asked the managing director of a GmbH to file for insolvency, although the company had long been insolvent.

It was of no use to the supervisory board members that the supervisory board was set up as a voluntary control body of the GmbH. According to the company's articles of association, the supervisory board had to supervise the management - there was no mention of a limitation of liability.

Members of mandatory supervisory boards have long been subject to a comprehensive duty of supervision, but the fact that optional supervisory boards must also take their office seriously has so far received little attention. The ruling is now before the Federal Supreme Court for revision - but experts do not expect any significant changes.

If the majority shareholders retain profits for years instead of distributing them, the minority shareholders are unreasonably disadvantaged.

According to the Brandenburg Higher Regional Court, it is completely atypical for a limited liability company to retain its profits for years instead of distributing them. The judges ruled in favour of a minority shareholder who had been ordered by the company to repay a loan. At the time, he had acquired the company share with this loan because the profit distributions of earlier years made this appear financially sensible.

However, after he had acquired his share in the company, the majority shareholders decided to retain the profits and instead increased their remuneration as shareholder-managers (salary, bonuses, company car). When they then demanded repayment of the loan, the minority shareholder had had enough and went to court. The court ruled that the retention of profits constituted a serious disadvantage for the minority shareholder, so that the demand for repayment of the loan was an abuse of rights.

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