Entries by Ester Hahn

DOES THE GERMAN TEMPORARY EMPLOYMENT ACT [“ARBEITNEHMERÜBERLASSUNGSGESETZ” – AÜG] APPLY TO MANAGING DIRECTORS?

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According to the unanimous view in the literature on the AÜG, provisions under the AÜG are not applicable to managing directors. The Higher Social Court of Berlin-Brandenburg recently ruled that managing directors are subject to a statutory pension insurance due to an unauthorized temporary employment in accordance with the AÜG. Therefore, the question arises, whether and to what extent an employment of a managing director can nonetheless be affected by the AÜG.

FURNISHING OF UPSTREAM SECURITIES – HERE IS WHAT MANAGING DIRECTORS SHOULD PAY ATTENTION TO

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The Federal Court of Justice [Bundesgerichtshof – BGH] commented on the admissibility of the furnishing of securities granted by companies in favor of their shareholders and on the so-called capital maintenance rules in AGs [Aktiengesellschaft – stock corporation] and GmbHs [Gesellschaft mit beschränkter Haftung – limited liability companies]. Capital maintenance rules have an “indirect” effect […]

COMPLIANCE CLAUSES WITHIN SUPPLY CHAINS

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Compliance clauses are nowadays a standard component of many (framework) supply agreements between companies. When introducing these clauses into contract negotiations, they are often extremely one-sided and present a high risk for the clause addressee. The following article demonstrates approaches and arguments which can help to achieve a proper limitation of a compliance clause.

WAGE? – NEW CASE LAW ON MANAGEMENT PARTICIPATION PROGRAMS

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Management participation programs have always been in the spotlight of tax authorities, as in those cases a distinction has to be made between fully taxable wages and tariff-favored income from capital investment. Tax authorities have particularly classified leaver provisions as a decisive indication for the existence of wage. However, the Federal Court of Finance (BFH) […]

SPECIAL AUDIT IN ACCORDANCE WITH GERMAN STOCK CORPORATION LAW IN LIMITED PARTNERSHIPS WITH MANY MEMBERS OF THE PUBLIC AS LIMITED PARTNERS?

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The Federal Court of Justice [Bundesgerichtshof – BGH] has consistently extended the analogous applicability of the provisions under corporate law to Limited Partnerships with Many Members of the Public as Limited Partners [Publikums-Personengesellschaften] (hereinafter “Publicly Held Partnership”). However, it has so far not been decided by the BGH, whether the special audit in accordance with […]

IMPROVEMENTS AND AMENDMENTS TO LAW ON CONTRACTS FOR WORK AND SERVICES

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Contracts for work and services [“Werkverträge”] which have been concluded after 1st January 2018 are subject to amended regulations. In particular, the law applying especially to construction contracts was substantially reformed. In addition, “Bauträgerverträge” [building developer’s contracts] as well as “Architekten- und Ingenieursvertrag” [architect’s and engineering contracts] were regulated in the German Civil Code [Bürgerliches […]

IN GENERAL, SHAREHOLDER LOANS ARE NOT TAKEN INTO ACCOUNT AS SUBSEQUENT ACQUISITION COSTS WITHIN THE SCOPE OF SECTION 17 ESTG ANYMORE

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By its judgment of 11 July 2017 – IX R 36/15, the German Federal Fiscal Court (BFH) has fundamentally changed its jurisdiction regarding the clasification of equity-replacing financial aids of shareholders to their company as acquisition costs within the scope of section 17 of the German Income Tax Act (EStG). Financial aids are, for example, […]

RESIGNATION OF THE MANAGING DIRECTOR OF A “ONE PERSON LIMITED LIABILITY COMPANY” (“EIN-MANN-GMBH”): RISK OF INVALIDITY DUE TO ABUSE OF LAW

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Basically, the managing director of a limited liability company can quit his position as managing director at any time and without notice period by simple notification. However, such resignation from his position is subject to certain restrictions. In particular, if the resigning managing director is the sole shareholder and managing director of the limited liability […]