Legal advice for a German limited liability company (GmbH) as well as its shareholders is one of the core areas of 3Q|Law's activities. Starting with the selection of the appropriate legal form, through the formation of a German GmbH and the avoidance of associated liability risks, to the professional drafting of articles of association and advice to the management, all areas of German corporate law are linked to issues of inheritance law. The decisive factor is not so much whether the advice is provided by a specialist lawyer for German company law or a specialist lawyer for German corporate law, but rather that, if possible, both areas are seamlessly interlinked by a specialist for German company law and inheritance law, and that, if possible, tax parameters are also taken into account. Here, too, lateral thinking is called for. Since the German GmbH law regulates many topics only very inadequately, great care should be taken to avoid the disputes among shareholders that often arise in the course of a personalistically structured GmbH and to develop regulations that protect the shareholders and the company from damage in the best possible way in the event of an emergency. Here, too, the various exit options require careful regulation, because the sale of German GmbH shares, termination by a GmbH shareholder or the death of a GmbH shareholder definitely occur sooner or later for every GmbH shareholder. Since the entire value of the shareholding is then regularly at stake, either in the form of a settlement or in the form of a purchase price, the separating parties are often prepared to fight bitterly for it. In this case, a dispute between shareholders is often unavoidable.
Particularly in the case of German medium-sized companies, the interlinking of German GmbH law and family law or inheritance law is of special importance. For example, the company should be protected against any claims for equalization of gains arising in the event of the divorce of a shareholder or against claims for compulsory portions arising in the event of death.
In its legal advice, 3Q|Law also places particular emphasis on the personal liability of management, i.e. managing directors, supervisory board members and advisory board members, which has often gone unrecognized to date. Under German Law, they are personally liable without limitation for any breaches of duty with their entire assets, which can sometimes have catastrophic consequences. Although so-called D&O insurances are available to cover this risk, it should be borne in mind that they either refuse to pay benefits, or that their obligation to pay benefits is only established after years of litigation, or that the amount of cover is insufficient. Against this background, it is advisable for management in Germany to review its personal situation and structure it according to the liability risk.
The German stock corporation is not nearly as widespread among German SMEs as the GmbH or commercial partnerships oHG or KG. This is certainly due on the one hand to the fact that - compared to the GmbH - the share capital is twice as high at 50,000 Euros, as well as the so-called German d "strictness of the articles of association", which is why the stock corporation does not offer the same flexibility as a GmbH or a commercial partnership. Nevertheless, there are certainly cases where the stock corporation is the appropriate legal form, e.g. if an IPO is planned in the foreseeable future. It is also possible to combine a stock corporation with a commercial partnership, which in some cases provides the "best of both worlds".