Commercial Law

Posted on March 10th, by KrI2Ai6N2 in Rechtsgebiete. Comments Off

The attorneys of Harnisch & Partner have years of experience in advising shareholders, managing directors, and corporations.

Our firm aims to assist companies with their legal concerns by recognizing and avoiding problems early on. The most effective and efficient way to resolve internal company disputes is through out-of-court settlement. However, we are certainly willing to represent you in court if a settlement is not possible due to contract reasons or because no amicable agreement can be reached.

Our firm specializes in the following practice areas:

- The termination of corporations – the redemption of shares or rather the expulsion of a shareholder

The dismissal of a shareholder is often the only way to get rid of an unpleasant and disruptive partner. Considering the consequences for the departing shareholder, termination should only be used as a last resort.

The option of expulsion must be included in the articles of incorporation and the relevant provisions must have existed when the shares of the unpopular partner were acquired. Furthermore, the reason for expulsion must be specified in the articles of incorporation and determined at a shareholder meeting. The departing shareholder has the right to participate in the meeting and the right to be heard, however cannot vote. Dismissed shareholders must be compensated for the loss of their positions, which is measured by the economic value of their shares. Share redemption implies the elimination of the shares and the accompanying membership rights. The resolution to redeem company shares takes effect with notice to the excluded shareholder and not with the payment of compensation, provided the articles of incorporation do not state otherwise.

Shareholders can be excluded through legal action if there is no provision regarding share redemption in the articles of incorporation. Providing a so-called important reason for the expulsion is a prerequisite to filing a complaint. Seriously violating the articles of incorporation, undermining the relationship of trust, and proving difficult to work with are considered important reasons. A previously effective shareholder agreement is required before filing a complaint, although this is just a formality with two-person corporations. The termination of the corporation occurs when judgment is entered accordingly.

- The dissolution of corporations

According to § 60 Abs. I Nr. 2 GmbHG, a corporation can be dissolved with a 75% majority vote, as long as the articles of incorporation do not provide differently. Therefore, corporations are only dissolved through mandates in certain cases with a showing of an important reason by the dismissed shareholder. Dissolution through judicial decision might be needed when the initial purpose of the corporation cannot be accomplished anymore, yet the shareholders do not agree on dissolution or compensation for the expelled shareholder.

- Contesting a shareholder resolution

Erroneous resolutions are generally invalid from the outset. Especially serious resolution errors, such as defective notice or defective notarization, lead to the invalidation of the resolution in accordance with § 241 AktG and can be challenged by filing a declaratory judgment. The action should be brought against the corporation and is not time-sensitive.

Less significant mistakes, such as violations of the articles of incorporation or the law, must be challenged within the prescribed time period in order to be declared void. If the resolution is not challenged within the time period, then the erroneous resolution remains effective. The deadline for contesting resolutions is generally one month from when the resolution is made, unless stated contrarily in the articles of incorporation. The contested resolution is declared void by the court if the challenge is successful.

- Injunctive relief and compensatory damages

The corporation usually raises a claim for injunctive relief and compensatory damages against the managing director for violating original obligations. Corporate law provides for a mandatory shareholder resolution regarding this claim procedure. A decision can be reached up until the end of oral arguments, although unnecessary for interlocutory injunction requests due to the urgency of the matter.

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