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German Tax and Legal News

Reform of the German Reorganization Act resolved

In June 2011, the German Upper House resolved to enact the Reform of the German Reorganization Act, with a view to simplifying reorganizations of enterprises in Germany by abolishing bureaucratic formalities and providing financial relief. The reform also adopts the EU Directive of September 2009 regarding the reporting and documentation requirements in mergers and divisions (Directive 2009/109/EC of the European Parliament and the European Council of September 2009).

Key aspects of the reform are as follows:

  • Shareholders may be notified (and documentation provided) electronically of the shareholders meeting to resolve on a proposed reorganization; 
  • The need to prepare a special interim balance sheet may be waived; 
  • A shareholders’ resolution may be waived in the case of a 100%-owned subsidiary company that is to be merged into its parent company; 
  • The options for squeeze-outs are extended in the case of a merger of a 90 % subsidiary company with its majority shareholder; and 
  • Audits required under the Reorganization Act and the Stock Corporation Law may be carried out by the same expert.

The reform will become effective one day after its publication in the Federal Law Gazette, which is expected in the near future. 

If you have any questions, please contact Dr. Tim Luthra of Raupach & Wollert Elmendorff Rechtsanwaltsgesellschaft mbH.

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