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Shareholder disputes - resolution deficiency law -

Power struggle among shareholders

Ende mit „Schrecken“ oder „Schrecken“ ohne Ende?

If there is a dispute between shareholders, this often ends up in court. In procedural terms, such actions are - as a rule - clothed in the "corset" of an action for defects in a resolution, in which the shareholder bringing the action asserts the invalidity or nullity of a shareholder resolution.

With effect from 1 January 2024, numerous changes to partnership law will come into force as part of the amendment to partnership law (Partnership Law Modernisation Act, MoPeG). These include the fact that the legislator has now amended the law on defective resolutions for commercial partnerships in Sections 110 et seq. of the new version of the German Commercial Code (HGB).

There is no corresponding codification in the law relating to limited liability companies (GmbHG) or partnerships (Gesellschaft bürgerlichen Rechts, GbR; Partnerschaftsgesellschaft, PartG). It remains to be seen how the law on defective resolutions will develop outside the law governing commercial partnerships.

The following is a brief overview of the special features of the law on defective resolutions - depending on the respective legal form:

I. Defects in resolutions of the stock corporation (AG)

The right to pass resolutions concerning the AG is regulated in Sections 241 et seq. AktG. The AktG differentiates between contestable (action for rescission) and void (action for annulment) resolutions of the Annual General Meeting.

If a resolution of the Annual General Meeting is only contestable, the manner in which the defect in the resolution is asserted depends on whether the resolution in dispute has been adopted or not. Only a resolution that has been adopted can be challenged in court by means of an action for annulment. The invalidity of resolutions of the Annual General Meeting that have not been duly adopted can only be asserted by means of a general action for declaratory judgement within the meaning of Section 256 ZPO.

Among other things, the AktG contains provisions on the group of persons entitled to contest a judgement (Section 245 AktG, right to contest), the contestation period (Section 246 AktG), the possible grounds for contestation (Section 241 AktG) and the legal scope of a favourable judgement (Section 248 AktG).

II. Deficiencies in resolutions of a limited liability company (GmbH)

In contrast to the AG, the GmbHG does not contain any corresponding statutory provisions on the right to pass resolutions. Case law has always applied the provisions of the AktG accordingly to GmbHs. It remains to be seen whether this practice can be maintained once the changes introduced by the MoPeG come into force.

Consequently, GmbH law also differentiates between contestable and void resolutions. Case law generally also applies the one-month period for actions for avoidance under the German Stock Corporation Act (AktG) (Section 246 AktG) to the GmbH.

III. Resolutions in the case of partnerships

In the case of commercial partnerships (OHG; KG; GmbH & Co. KG), it is currently still the case that every unlawful resolution is null and void. Consequently, a general declaratory action pursuant to Section 256 of the German Code of Civil Procedure (ZPO) is the admissible type of action.

From 1 January 2024, the MoPeG will introduce sections 110 et seq. HGB new version will be introduced. The legislator has now specifically codified the law on the avoidance of resolutions relating to commercial partnerships in the HGB. The avoidance model - differentiation between contestable and void resolutions - now also applies to commercial partnerships.

With regard to the time limit for bringing an action for rescission, the new version of Section 112 subsections 1 and 2 HGB applies, according to which an action must be brought within three months of notification of the disputed resolution.

III. Resolutions in the case of commercial partnerships

The changes introduced by the MoPeG do not apply to partnerships, as Sections 110 et seq. HGB new version only apply directly to commercial partnerships. Furthermore, no reference norm has been included in the HGB, by means of which the avoidance model could also be applied to the GbR, for example. The legislator could not bring itself to codify the right to challenge resolutions in the German Civil Code (BGB). Here too, it remains to be seen how case law and literature will develop after the MoPeG comes into force.

In the meantime, it remains the case that unlawful resolutions are null and void and must be challenged in court by means of a general declaratory action (Section 256 ZPO).

V. Conclusion

As already indicated at the beginning, actions for defective resolutions can take a long time and put a considerable strain on the nerves of the parties concerned. However, they can be an opportunity to "get the parties concerned round the table" and find a solution that both parties can live with in the long term.

If you do not agree with resolutions passed by the company in which you hold an interest, you can contact us at any time. In individual cases, we will then check whether it makes legal sense to take action against the resolution in question and will of course also accompany you to court.

Tolga Topuz

November 2023 - Düsseldorf -

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