Index

A

Ad-hoc disclosure

disclosure of inside information, 76 in M&Atransactions, 76 self-exemption, 76

Advisory board (AG), 47 Advisory board (GmbH), 94 AG

advantages, 39 bodies, 39, 41 charateristics, 38 disadvantages, 40 dissolution, 64 formation, 62 juristic person, 38 liquidation, 64 liquidators, 64 management, 43

separation of ownership and control, 41 statutory minimum capital, 40 two-tier board system, 41

AGB See Standard terms of contract Agio, 56

Aktien See Stocks

Aktienart See Form of Stocks

Aktiengesellschaft See AG

Aktionäre See Stockholders Amtsgericht See Court system Antitrust law See Competition law

Articles of association (AG)

Articles of association (GmbH), 81, 107 example, 194

Asset deal See Private M&A Auslegung See interpretation of statutes

B

BaFin See Federal Security Supervisory Authority

Basic Law See Constitution

BDA See Collective Bargaining Betriebsvereinbarungen See Works agreements BGB See Civil Code

BGB-Gesellschaft See Civil law partnership

Branch, 24

Bundesgerichtshof See Court system Bundesverfassungsgericht See Federal Consti-

tutional Court

Bürgerliches Gesetzbuch See Civil Code

C

Capital increase (AG), 58 authorized capital, 59 contingent capital increase, 59

increase from retained earnings, 60 ordinary capital increase, 58

Capital markets law allocational efficiency, 71 definition, 71

EU law, 73

individual investor protection, 72 institutional efficiency, 71 institutional investor protection, 72 Lamfalussy process, 74

MarketAbuse Directive, 75 MiFID, 75

objectives, 71 operational efficiency, 71 Prospectus Directive, 75 sources of, 72 Transparency Directive, 75

Capital preservation (AG), 61

Capital preservation (GmbH), 83, 84, 95 Capital reduction (AG), 60

ordinary capital reduction, 60 redemption of stocks, 61 simplified capital reduction, 61

Capital structure, 54 Cartesio decision, 143 Case law, 18 Centros decision, 139

CISG See Conflict of Laws

Civil Code, 8 Civil law, 18

Civil law partnership, 26 Co-determination, 23

board-level co-determination, 68

Coal and Steel Co-DeterminationAct, 69 Co-DeterminationAct, 69

full-parity co-determination, 69 labor director, 70

One-Third Co-DeterminationAct, 69 quasi-full parity co-determination, 69 shop-level co-determination, 67

Collective bargaining, 65

Act on Collective BargainingAgreements, 66

company agreements, 66

freedom from state intervention, 66 sectoral agreements, 66

Commercial Code, 10

Company forms See Forms of business organizations

Company law

recurrent issues of, 23 sources of, 10

Competition law, 11 competition of legal systems, 149 Conflict of laws, 13

CISG, 15

companies See International company law connecting factors, 15

connection, 15

corporations See International company law

global remission, 15 Insolvency Regulation, 14 ordre public, 15

public policy, 15 renvoi, 15 Rome I, 14 Rome II, 14 sources of, 13

Constitution, 4, 66 freedom of coalition, 66

fundamental rights, 4 legislative bodies, 5 third party effect, 5

Consumers, 9 Contributions in kind

AG, 62

Copyright law See Intellectual property

Corporate Governance, 68 Court system, 16

district courts, 16

Federal Court of Justice, 17 Higher regional courts, 17 municipal courts, 16 stages of appeal, 17

Court System

Federal Constitutional Court, 16 sources of, 16

Covenants See Private M&A

Cross-border merger common draft terms, 159 employee participation, 160

independent expert report, 159 merger report of management, 159 registration, 160

shareholder approval, 160 Cross-border mergers

EU Directive, 158

Cross-border transfer of seat International company law

D

Daily Mail decision, 138 Debt financing, 54

DGB See Collective bargaining

Directors’duties, 94 accounting duties, 95 business judgment rule, 99 business letterheads, 98

calling of the shareholders’meeting, 96 capital preservation, 95

Commercial Register, 97 duty of care, 98

duty to file for insolvency, 96 duty to prepare and submit annual

accounts, 96 fiduciary duties, 98 fiscal duties, 98 organizational duties, 101 raising of share capital, 94 social security, 98

Directors’Duties

duty to file for insolvency, 33 joint responsibility, 102

Dissolution (AG), 64

Drittwirkungvon Grundrechten, 5 Due diligence See Private M&A

inside information, 76

E

ECJ See European Court of Justice eG See Registered co-operative EGBGB See Conflict of laws EHUG, 87

Einzelkaufmann See Sole propietorship

Employee participation, 65 Entrepreneurial company See UG Entrepreneurs, 9

Equity, 53

Equity financing, 54, 55

ESUG, 35

EU Takeover Directive, 124, 129 European Company, 41, 151

contingency rules, 153 employee participation, 153 formation, 152 governance structure, 152 legal framework, 151 possible use, 154

special negotiating body, 153 European Court of Justice, 17 European law, 20

Accession Treaties, 20 decisions, 21 directives, 21 Founding Treaties, 20

fundamental freedoms, 22 legislative instruments, 20 opinions, 21

primary law, 20 recommendations, 21 regulations, 21 secondary law, 20 supremacy of, 21

European Private Company, 23 Commission proposal, 156 employee participation, 157

statutory minimum capital requirements, 157

transfer of seat, 157 External financing, 53

F

Federal Cartel Office, 123

Federal Financial SupervisoryAuthority, 126,

129

Federal Security SupervisoryAuthority, 73

Formation (AG), 62

auditing requirements, 63

deed of formation, 63

formation report, 63 notarization requirements, 63 registration, 63 subscription of shares, 63

Formation (GmbH), 85

formation by representatives, 86 formation deed, 86

MoMiG, 82

payment of share capital, 87 registration, 86, 87

regular formation procedure, 86 simplified formation procedure, 87 standard template, 82, 87 subscription of shares, 86

Forms of business organizations, 26, 30 Freedom of Establishment See International

company law Fremdorganschaft, 84

G

GbR See Civil law partnership Gelatine decisions, 44

General commercial partnership, 27 Germany,

civil law system, 18 economic background, 1, 2 exports, 2

judicial system See Court system political layout, 4, 5

Geschäftsführer See Managing director (GmbH)

Gesellschaftsvertrag See Articles of association

GmbH advantages, 84

assignment of shares, 80, 108, 109 bodies, 91

business purpose, 86 cash pooling, 83 characteristics, 80 dissolution, 113 history, 81

juristic person, 80 liquidation, 113 liquidators, 113

list of shareholders, 83, 97 reform of statutory framework See

MoMiG, 81 share purchase, 83 shareholder loans, 83

statutory minimum capital, 80 transfer of seat, 84

upstream loans, 83

GmbH & Co. KG Grundgesetz See Constitution

H

HGB See Commercial Code

Hierarchy of norms, 4 Hierarchy of Norms, acts of the states, 6 federal acts, 6

federal ordinances, 6 ordinances of the states, 6 predominance of federal law, 6

Holzmüller decision, 43, 48

I

Insider trading, 75 derivatives, 75 due diligence, 76

inside information, 75, 76 insider securities, 75 prohibition of, 75

Insolvency law, 30 Anfechtungsrecht, 34 creditors’assembly, 35 insolvency plan, 35 objectives, 1, 31 preferential claims, 34 regular claims, 34

right to set aside transactions, 34 separate disposition, 34 separation right, 34 subordinated claims, 34

Insolvency proceedings, 31 petition to open, 32 preliminary proceedings, 33

reasons for opening See Insolvency reasons regular proceedings, 34

reorganization Proceedings, 35 Insolvency reasons, 31

Illiquidity, 31 imminent illiquidity, 32 over-indebtedness, 31

Insolvenzgründe See Insolvency proceedings Inspire Art decision, 142

Intellectual property, 12 Internal Financing, 53 International company law Cartesio decision, 143 Centros decision, 139

creatures of the law-doctrine, 139 Daily Mail decision, 138

emigration of corporate seat, 144, 156

Gründungstheorie, 137

Inspire Art decision, 142 problem, 134

real seat doctrine, 136

real seat doctrine – modified version, 137

revision proposal, 145 Segers decision, 137 SEVIC Decision, 161

status-quo of German rules, 145 theory of incorporation, 137 Überseering decision, 141

International treaties, 14 Interpretation of statutes, 19

Investor protection See Capital markets law ITT decision, 109

J

Joint ventures advantages, 162

checklist for relevant issues, 163 use of, 161

K

KG See Limited commercial partnership KGaA See Partnership limited by shares Kommanditist, 28

Komplementär, 28

L

Labor law, 12 Labor unions, 65

Landgericht See Court system

Limited commercial partnership, 28 Limited liability company See GmbH Liquidation (AG), 64

Ltd,

advantages and disadvantages, 150 as an alternative, 149 establishment of branch, 25

M

M&A, 62, 86, 87, 132 merger control, 140 private M&A, 132 public M&A, 132 Macrotron decision, 44

Management board (AG), 42 appointment, 42 chairman of the board, 42 composition, 42

instructions from shareholders, 43 instructions from supervisory board, 43 power of attorney, 45

power of representation, 44 reporting obligations, 45 revocation of appointments, 42 rules of procedure, 45, 46 rules of procedures, 43 sphere of competence, 42

Managing director (GmbH), 81 appointment, 92, 93

case assignment plan, 103 duties See Directors’Duties eligibility, 93

instructions from shareholders, 81, 93 joint responsibility, 102

liability by estoppel, 100

liability for belated filing for insolvency, 33, 101

liability for culpa in contrahendo, 100 liability for dangerous products, 101 liability for violation of competition laws,

101

liability to shareholders, 99 liability to tax authorities, 102 liability to the company, 99 liability under tort law, 101 management, 93

power of representation, 93 revocation of appointment, 92, 93 rules of procedure, 92

statute of limitations, 103 Managing Director (GmbH), 41 rules of procedure, 85, 196 Merchants (Commercial Code), 10

Mezzanine financing, 54 Minority shareholders (GmbH),

casting vote, 112 consent requirements, 111

increased number of voting rights, 112 judge-made rules, 109

restricition on revocation of managing director, 109

right of appointment, 111 right of nomination, 111 special privileges, 110 statutory protection, 108 veto right, 112

Vinkulierung, 109 MoMiG, 30, 82

O

Oberlandesgericht See Court system oHG See General commercial partnership

P

Partnership limited by shares, 29 Piercing the corporate veil,

abuse of the corporate form, 106 commingling of assets, 106 destructive interference, 106 substantial undercapitalization, 105

Private international law See Conflict of laws Private law, 7

Private M&A asset deal, 134

auction process, 135 closing, 139 covenants, 139 due diligence, 136 indemnities, 138

information memorandum, 135 purchase price, 137

share deal, 133

share sale and transfer agreement, 137 single-bidder process, 137

transfer of employees, 134 warranties, 138

Public law, 7 Public M&A

acquisition of control, 142 consideration, 145 controlling interest, 143 duty of neutrality, 146 evaluation of offer, 145 financing, 144 frustration of a bid, 146 mandatory offer, 142 offer document, 143 price, 146

publication of offer document, 144 takeover-bid, 142

Public TakeoverAct, 73, 124

R

real seat doctrine See International company law

Redemption of stocks, 61 Registered co-operative, 29

S

Satzungsautonomie, 85

Satzungsstrenge, 40, 85 SE See European company

SecuritiesAcquisition and TakeoverAct See Public Takeover Act

Securties TradingAct, 72 Segers decision, 137 SEVIC Decision, 161

Share ownership notification, loss of rights, 78 notfication period, 77 requirement to notify, 77 thresholds, 77

violation of obligation, 78

Shareholders’liability, 104

judge-made rules See Piercing the corporate veil

statutory obligations, 104 Shareholders’meeting (GmbH), 91 calling of the meeting, 92 majority requirements, 92

sphere of competence, 92 Silent partnership, 29

Solange decision See European law, supremacy of

Sole proprietorship, 26 Squeeze-out procedures, 130

general squeeze-out procedure, 130, 131 takeover-related squeeze-out procedure,

132

Standard terms of contract, 9

stille Gesellschaft See Silent partnership

Stock corporation See AG Stock ExchangeAct, 73 Stockholders,

action to set aside a resolution, 51 collective minority rights, 53 individual minority rights, 50 predatory stockholders, 51 preferred stockholders, 57 release procedure, 51

right to cast a vote in the stockholders’ meeting, 50

right to participate in the stockholders’ meeting, 50

right to request information, 51 Stockholders (AG)

minority rights, 50 participation rights, 50 pecuniary rights, 50 rights of stockholders, 50

Stockholders’meeting agenda, 49

decision-making procedure, 48 electronic voting, 50 invitation, 49

preparation of meeting, 49, 50 qualified majority, 50

right to pass resolution, 47 simple majority, 50

sphere of competence, 43, 47 unwritten competencies See Holzmüller

decision voting by proxy, 49

Stockholders’resolution See Stockholders’ meeting

Stocks, 55

bearer stocks, 57

classes of stocks, 56 form of stocks, 57 non-par value stocks, 56 ordinary stocks, 56 own stocks, 62

par value stocks, 56 preference dividend, 57 preferred stocks, 56 premium, 56 registered stocks, 57, 58

restricted registered stocks, 58 stock register, 58

stocks with limited voting rights, 57

Unter-Pari-Emission, 56 Supervisory board (AG)

chairman of, 45 co-determination, 46 composition, 45

duties and responsibilities, 46 election, 46

employees’representatives, 46 representation vis-a-vis management, 47 resignation of member, 46

right to request reports, 45 special committee, 47 stockholders’representatives, 46 termination of appointment, 46

Supervisory board (GmbH), 81, 94

T

Tarifvertrag See Collective bargaining TFEU See European law, founding treaties

U

Überschuldungsstatus, 32

Überseering decision, 141 UG, 80, 82, 88, 89

Unternehmergesellschaft See UG

V

vinkulierte Namensaktien, 58 Vinkulierung, 118 Vorzugsaktionäre, 57

W

Works agreements, 67 Works councils, 67 functions, 68

participation rights, 68 responsibilities, 67

right to establish a works council, 67 Works agreements, 67

Works ConstitutionAct, 67