German Stock Corporation Law
Management Board, Supervisory Board, Shareholders and General Meeting in Germany
Advising on german stock corporation law is one of the special areas of expertise of our law firm. Our clients include stock corporations, shareholders, board members and supervisory board members - whether large and listed on the MDAX or small and unlisted. From our offices we advise nationwide and internationally.
For a non-binding inquiry, please contact one of our germanstock corporation law experts directly by phone or e-mail or use the contact form at the bottom of this page.
Legal Expertise in German Stock Corporation Law
Our lawyers specializing in german corporate law advise stock corporations and their governing bodies on all legal issues:
- Formation of stock corporations (new formation, conversion from/to stock corporations)
- Advice and representation of management boards and supervisory boards (rights, duties, liability, rules of procedure)
- Raising capital through capital increases, conditional capital, participation right agreements and convertible bonds
- Drafting and review of supervisory board and management board contracts
- Preparation and conduct of annual general meetings
- Defense against or initiation of shareholder lawsuits or actions for defects in resolutions
- Disputes between shareholders (shareholder disputes), management boards and supervisory boards
- Assertion/defense of claims for damages against management and supervisory boards
- Special audit, special representative, action admissibility proceedings
- Advice on group law, affiliated companies
Important areas in german Stock Corporation Law
Despite the increasing popularity of the AG as a legal form for companies in Germany, german stock corporation law is still a specialized subject that requires great expertise in german corporate law as well as in economic and tax matters from the advising lawyer. ROSE & PARTNER supports you with qualified specialist lawyers and tax advisors in all questions of german stock corporation law.
Detailed information on individual topics can be found on the following pages:
Nature of the German Stock Corporation, Comparison with the GmbH in Germany
The german stock corporation (AG), as a publicly traded corporation, is fundamentally capital market-oriented, even though only a comparatively small proportion of AGs are actually listed on the stock exchange. Attractive features are the small denomination and the high fungibility of the capital. As with the german GmbH, there is basically no personal liability of the shareholders. A tripartite structure of the organization with management board, supervisory board and general meeting is mandatory. Compared to the GmbH, the management (executive board) is more independent of the shareholders; in addition, there are stricter capital maintenance rules in Germany.
Formation of a Stock Corporation in Germany
The possibilities for structuring the articles of association of the AG are limited in comparison to the GmbH ("strictness of the articles of association"). The advising lawyer is therefore particularly challenged to make optimal use of the possibilities offered by german stock corporation law when drafting the articles of association. The german stock corporation law normally provides for a cash formation; however, a formation in kind is also possible, in which shares are taken over against a contribution in kind. After appropriate examination by the appointed lawyer and tax advisor, a formation protocol is notarized and a formation report is prepared. After the formation audit by the administration, the application for registration of the stock corporation in the german commercial register is made.
For more details, see: Formation of a stock corporation in Germany
The Management Board in Germany
The management board represents the stock corporation in and out of court and is responsible for managing the company in Germany. It is not subject to any instructions, in particular not from the general meeting - i.e. the shareholders - or from the supervisory board. As a representative of the corporate body, the management board has a large number of rights and duties in Germany. Advising members of the executive board, in particular on questions of liability and on the commencement and termination of management board activities, is therefore a focal point of our lawyers' work in the field of german stock corporation law.
A detailed guide to the rights and duties of the board of directors of a stock corporation in Germany, written by attorney Dr. Jänig (specialist attorney for german corporate law, head of the Berlin office) can be found here: Rights & Duties of the AG executive board in Germany.
We have also provided detailed information on the management board contract.
The Supervisory Board in Germany
The main function of the supervisory board in Germany is to supervise the management board. The supervisory function is to be understood broadly. The supervisory board appoints the management board, dismisses the management board, concludes and terminates management board contracts and enforces the AG's claims against the management board in Germany. In some areas, the supervisory board also has an advisory function, the central element of which is the mandatory approval of the supervisory board for particularly relevant management board measures.
One principle in the relationship between the members of the supervisory board is equality. All supervisory board members in Germany, whether representing the shareholders or the workforce, have the same rights and duties. We advise supervisory board members in particular on how to exercise their information and participation rights vis-à-vis the management board in accordance with german stock corporation law, as well as on liability issues and compensation matters.
Further information on the supervisory board and related legal issues can be found here: Rights & duties of the AG supervisory board in Germany.
The General Meeting in Germany
The general meeting is the voice of the shareholders in Germany. This is of particular interest because german stock corporation law grants the individual shareholder only very limited rights (compared to a GmbH shareholder). Instead, the German Stock Corporation Act (AktG) provides rights and opportunities for influence for the general meeting or for the association of individual shareholders in the general meeting. The general meeting in Germany is convened by the board of management and acts by passing resolutions. General meetings should regularly be prepared by a lawyer due to the often complex nature of the meeting, with the relevant mandate to be issued by the management board. Conflicts under german stock corporation law, which may lead to shareholder lawsuits, can arise in particular following a general meeting. Our law firm provides comprehensive advice on all legal issues relating to the general meeting of an AG .
Detailed information on shareholder actions for rescission regarding resolutions at the GM can be found here: Shareholder lawsuit, annual general meeting
The Shareholder in Germany
According to the German Stock Corporation Act (AktG), individual shareholders are entitled to numerous membership rights. These can be divided into so-called property rights (above all dividend rights, subscription rights) and administrative rights (voting rights, right to information, rights to contest resolutions). With a few exceptions, however, shareholders can only exercise these rights in connection with the (annual) shareholders' meeting in Germany. For example, the right to information is limited to the possibility of requesting information from the management board at the annual general meeting in Germany.
An important control instrument of the individual shareholder in Germany is the right to have resolutions of the annual general meeting reviewed by the courts by way of an action for rescission or nullity. Finally, it should be emphasized that german stock corporation law gives shareholders (individually or as part of a group) with a certain shareholding more extensive rights, e.g. the right to initiate a special audit by an external auditor (Art. 142 AktG). Finally, shareholders also have the option of initiating a liability action against members of the executive board and supervisory board, for example by having a special representative appointed by the court (Art. 147 AktG) or in the context of the action admissibility procedure (Art. 147 AktG).
Our Lawyers for Advice on German Stock Corporation Law
Stock corporation law is a special discipline of corporate law in Germany. The handling of stock corporation law mandates is carried out by our attorneys specializedin corporate law and/or attorneys specialized in stock corporation law issues:
- Dr. Ronny Jänig (Certified specialist for corporate law, Berlin office),
- Dr. Jens Nyenhuis (Certified specialist for corporate law, Hamburg office),
- Finn Dethleff (Attorney at law, Munich office)
Our experts in german stock corporation law work closely as a team with other lawyers, specialist lawyers and tax advisors in our law firm, in particular in the areas of geman tax law, labor law, insolvency law and commercial law.