The Complex Process of Redemption of GmbH Shares
In the world of limited liability companies (GmbH), conflicts among shareholders can lead to the redemption of shares. Such a redemption can effectively exclude the affected shareholder from the company. Given that this process has far-reaching consequences for both the company and the individual shareholder, it is important to understand it thoroughly and act accordingly.
When and How Does the Redemption of Shares Occur?
The redemption of shares is usually decided at the shareholders' meeting. This resolution is legally unchallengeable only if all legal and statutory requirements are met. In the case of a valid redemption, the affected shareholder has a compensation claim against the company.
According to German law, such redemption is only permissible if it is allowed in the company's articles of association. Without such a clause, a shareholder can only be excluded through judicial means, which can be a lengthy and costly process. Therefore, it is advisable to include a redemption clause in the articles of association when establishing the company.
Who Decides on the Redemption?
The shareholders' meeting decides on the redemption of shares. Typically, a simple majority decision is required unless the company's articles of association specify otherwise. The affected shareholder is usually excluded from the vote to avoid conflicts of interest.
Sometimes, the decision-making authority over the redemption of shares can be delegated to other bodies of the company, such as the supervisory board or management. However, this must be explicitly regulated in the company's articles of association.
Are Grounds for Redemption Required?
Forced redemption of shares against the will of the affected shareholder is only permissible if a valid reason is stipulated in the articles of association. Arbitrary reasons are not allowed. Valid reasons could include the termination of an employment relationship between the company and the shareholder or the loss of the position as managing director.
When Does the Redemption Become Effective?
The redemption becomes effective as soon as the resolution is passed and communicated to the affected shareholder. A successful challenge of the resolution due to defects or the absence of a resolution means the redemption is invalid, and the affected shareholder retains their position.
It is important to note that the payment of compensation is not required to make the redemption effective. However, if it is clear that the compensation cannot be paid from the GmbH's free assets and this would violate the principles of capital maintenance, the redemption resolution may be considered void.
Liability Risks and the Fate of Redeemed Shares
After the redemption of shares, there is a personal liability risk for the remaining shareholders if the GmbH cannot pay the compensation to the excluded shareholder.
The redeemed shares are essentially "destroyed" but can be re-created by a shareholders' resolution and distributed among the remaining shareholders. Unlike a classic share purchase agreement, notary fees can be saved, and tax advantages can be achieved since the compensation payment is made by the GmbH.
The Role of the Shareholder List
After the redemption of shares, there is often an attempt to remove the affected shareholder from the shareholder list. If successfully carried out, the affected shareholder loses their rights against the GmbH. Therefore, there can often be a "battle for the shareholder list."
How We Can Support You
The process of redeeming shares is complex and legally demanding. If needed, we are happy to guide you through this process and protect your interests. Contact us without obligation by phone, email, or use our contact form.
