Under previous and current statutory law (Limited Liability Companies Act, GmbHG), the managing directors of a German limited liability company (GmbH) are required to submit a list of all shareholders at the time of incorporation and a revised list upon every change in the shareholder structure (i.e. a change of shareholders or their respective shareholdings).
In November 2008, the GmbHG was fundamentally revised by the MoMiG (German Act on the Modernization of the GmbHG and the Prevention of Abuse), which also included amendments with regard to the list of shareholders. One of the main objectives of the MoMiG was to upgrade the importance of the shareholder list, e.g. by introducing a system of bona fide acquisition of shares based on the list of shareholders. It also should be noted that under the applicable rules, a new shareholder or a shareholder with a revised participation quota in a GmbH is regarded as a shareholder only if he/she is on the list of shareholders accepted by the commercial register. Therefore, unless the list of shareholders is accepted by the commercial register, a shareholder may not properly execute his/her shareholder rights (including voting rights), which can impact the validity of shareholder actions (e.g. the adoption of financial statements, the approval of profit transfer agreements, etc.). Hence, it is not surprising that the statutory provisions on the list of shareholders and its correct form have become subject to controversy and litigation. This article briefly summarizes some recent decisions related to the list of shareholders.
1. Shareholder list signed by managing director and notary public
Under the GmbHG, a notary public is required to sign and submit the revised list of shareholders in all cases where a notary public has contributed to a change in the shareholder structure. In all other cases, the managing director of the company must sign and submit the list. In a case decided by the Higher Court (OLG) Hamm, a notary public had contributed to a change in the shareholdings of a GmbH and had signed and submitted the revised list of shareholders. The managing director also signed the list. The commercial register refused to accept the list arguing that it was unlawful for the list to have two signatories. The court disagreed, holding that the additional signature by the managing director was not harmful because the notary public – the person required to sign the list – had done so.
2. Intermediate list of shareholders in consecutive chain transfers
The District Court (LG) Munich has ruled that it is necessary to sign and submit intermediate lists of shareholders where there has been a consecutive transfer of shares. In the case, a change in management and the registered seat of a GmbH was submitted for registration with the commercial register. The relevant shareholder resolution was adopted by “S” as the sole shareholder of the GmbH. Immediately before adoption of the shareholder resolution, “S” as the new shareholder had received an assignment of the shares in the GmbH from “D” as the previous shareholder. Immediately after adoption of the shareholder resolution, “S” further assigned the shares in the GmbH to “W”. The list of shareholders submitted to the commercial register only showed “W” as the sole shareholder. The commercial register refused to accept the list and refused to register the change in management and registered seat on the grounds that an additional list had to be submitted showing “S” as the intermediate shareholder. The LG Munich confirmed the position of the commercial register.
3. Consecutive numbering of shares
The GmbHG requires each share of a GmbH to have a consecutive number. In a case decided by the Higher Court (OLG) Bamberg, a GmbH had 12 shares with consecutive numbers 1-12. The 12 shares were transferred to new shareholders. The notary public submitted a revised list of shareholders in which he deleted the shares with the consecutive numbers 1-12 and instead listed 12 shares with the consecutive numbers 13-24 and provided details of the new shareholders. The OLG Bamberg refused to accept the revised list on the grounds the consecutive numbering of the shares had to be continued. The court confirmed the view of the commercial register that it had been the intent of the legislator – by introducing the consecutive numbering requirement – to individualize the shares.
The above decisions highlight the importance of the shareholder list and the various issues that can arise. Shareholders in German resident corporations should analyze their obligations relating to the submission of shareholder lists and consult legal counsel when in doubt.
If you have any questions, please contact Dr. Tim Luthra of Raupach & Wollert Elmendorff Rechtsanwaltsgesellschaft mbH.
