The Company Act in Germany

The German Companies Act 

• Part 1: the formation of the company includes the requirements for choosing a purpose and a name for the business, having a registered office and appointing directors as well as the process for company registration in Germany.
• Part 2: the shareholders and the company includes information about the liabilities of the shareholders, the payment of capital and the ownership of shares.
• Part 3: representation and management, included here is information about the appointment of directors, the rights and duties as well as their evocation; also included here are the general principles for company representation as well as general accounting requirements like bookkeeping and balance sheet.
• Part 4: the amendments brought to the company’s Articles of Association presents the ways in which changes to the company can be performed (a share capital increase, the allocation of shares, the distribution of profits and others).
• Part 5: winding up a company presents the process needed to dissolve a company and render it null; the liquidation procedure is also presented as well as the requirements for the distribution of assets.
• Part 6: administrative, regulatory and criminal provisions in relation to managing a limited liability company; included here are the situations that concern a breach of confidentiality, the breach of duty in regards to statutory audits and others.

• Part 1: general regulations include the general requirements for this type of company, the nature of the stock company is defined as well as the regulations for listing on the stock exchange and the shared capital; included here are also a number of details about the voting rights.
• Part 2: the incorporation of the stock company refers to the preparation of the company’s documents, the contributions and the founders of the company; special consideration is given to the appointment of the supervisory and the management board.
• Part 3: the relationship between the shareholders and the company includes the main duties and liabilities of the shareholders as well as the manner in which the distribution of profits is to take place.
• Part 4: includes information about the manner in which a joint stock company operates and is divided into chapters, with chapter 1 referring to the management board, chapter 2 about the supervisory board, chapter 3 about the exploitation of influence over the company, chapter 4 the general meeting (with various subchapters).
• Part 5: accounting and profits distribution in case of the joint stock company is a comprehensive chapter that includes information about the company’s annual accounts and management report, the requirements for audit and the appropriation of profits.
• Part 6: changes brought to the company’s constitutive documents; like in the case of the limited liability company, this chapter refers to the amendments that can be brought to the AG, more comprehensive in this case.
• Part 7: refers to the situation in which the resolutions of the general meeting are null and the special audit that can be performed.
• Part 8: the dissolution of the company, the winding up of the AG, the duties of the liquidators, the distribution of the assets and the final statement on the company’s nullity. The final parts of the Stock Corporation Act refer to the possible punitive and administrative fines in case of violating the reporting obligations or those that concern the auditing of the accounts as well as several other situations.

Other relevant laws for doing business in Germany

• the German Civil Code,
• the Working-Time Act,
• the Act Concerning Paid Vacations,
• the Act Against Unfair Dismissal,
• the Act Concerning Trainees,
• the Act Concerning Disabled Employees, Maternity Leaves and Remuneration During Sickness.