{"id":3590,"date":"2019-06-21T09:20:32","date_gmt":"2019-06-21T07:20:32","guid":{"rendered":"https:\/\/it-landgraf.de\/shareholders-resolutions-with-permanent-effect\/"},"modified":"2019-09-04T10:39:37","modified_gmt":"2019-09-04T08:39:37","slug":"shareholders-resolutions-with-permanent-effect","status":"publish","type":"post","link":"https:\/\/it-landgraf.de\/en\/shareholders-resolutions-with-permanent-effect\/","title":{"rendered":"SHAREHOLDERS\u2019 RESOLUTIONS WITH PERMANENT EFFECT"},"content":{"rendered":"\n\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-hysbsi-7f7a37b18db3c5f2c296570559a8b88f\">\n.avia-section.av-hysbsi-7f7a37b18db3c5f2c296570559a8b88f{\nbackground-repeat:no-repeat;\nbackground-image:url(https:\/\/it-landgraf.de\/wp-content\/uploads\/3629.jpg);\nbackground-position:0% 0%;\nbackground-attachment:scroll;\n}\n<\/style>\n<div id='av_section_1'  class='avia-section av-hysbsi-7f7a37b18db3c5f2c296570559a8b88f main_color avia-section-default avia-no-shadow  avia-builder-el-0  el_before_av_section  avia-builder-el-first  hide_on_print avia-full-stretch avia-bg-style-scroll av-minimum-height av-minimum-height-40 av-height-40  container_wrap sidebar_right'  data-section-bg-repeat='stretch' data-av_minimum_height_pc='40' data-av_min_height_opt='40'><div class='container av-section-cont-open' ><main  role=\"main\" itemprop=\"mainContentOfPage\"  class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-3590'><div class='entry-content-wrapper clearfix'>\n<\/div><\/div><\/main><!-- close content main element --><\/div><\/div><div id='av_section_2'  class='avia-section av-g5p7xu-913ddc5b7e1bdeb35307f05a70e36801 main_color avia-section-default avia-no-shadow  avia-builder-el-1  el_after_av_section  avia-builder-el-last  avia-bg-style-scroll container_wrap sidebar_right'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-3590'><div class='entry-content-wrapper clearfix'>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-dl8teq-690e28229701327759000ddbcc97c130\">\n.flex_column.av-dl8teq-690e28229701327759000ddbcc97c130{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-dl8teq-690e28229701327759000ddbcc97c130 av_two_third  avia-builder-el-2  el_before_av_two_third  avia-builder-el-first  first flex_column_div av-zero-column-padding  '     ><style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-k04zwfwq-6cbc0b92d62ebf6e902dde95762e0960\">\n#top .av-special-heading.av-k04zwfwq-6cbc0b92d62ebf6e902dde95762e0960{\npadding-bottom:10px;\n}\nbody .av-special-heading.av-k04zwfwq-6cbc0b92d62ebf6e902dde95762e0960 .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n.av-special-heading.av-k04zwfwq-6cbc0b92d62ebf6e902dde95762e0960 .av-subheading{\nfont-size:15px;\n}\n<\/style>\n<div  class='av-special-heading av-k04zwfwq-6cbc0b92d62ebf6e902dde95762e0960 av-special-heading-h1 blockquote modern-quote  avia-builder-el-3  avia-builder-el-no-sibling '><div class='av-subheading av-subheading_above'>21. June 2019\n<\/div><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >SHAREHOLDERS\u2019 RESOLUTIONS WITH PERMANENT EFFECT <\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-cejtma-a776b0e5ebc93d6367a727c6374fee60\">\n.flex_column.av-cejtma-a776b0e5ebc93d6367a727c6374fee60{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-cejtma-a776b0e5ebc93d6367a727c6374fee60 av_two_third  avia-builder-el-4  el_after_av_two_third  el_before_av_two_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-k04zwuto-ac3f51e6bdd0a9f6c8e320968bf155a8 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><p><strong>In its decision dated 24 August 2018 (file no. 4 Wx 4\/18), the Cologne Higher Regional Court [<em>OLG<\/em>] had to deal with the effectiveness of shareholders\u2019 resolutions breaking through the Articles of Association at the limited liability company [<em>GmbH<\/em>]. The decision is an occasion to shed light on the consequences of shareholder resolutions that have a permanent effect under consideration of the provisions of sections 53, 54 German Limited Liability Companies Act [<em>GmbHG<\/em>].<\/strong><!--more--><\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-ad4v0i-7244a562a15e22a64c0c7b1bc8e9df1b\">\n.flex_column.av-ad4v0i-7244a562a15e22a64c0c7b1bc8e9df1b{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-ad4v0i-7244a562a15e22a64c0c7b1bc8e9df1b av_two_third  avia-builder-el-6  el_after_av_two_third  el_before_av_one_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-k04zzoak-734447577c010298e4d5fd0eb6213d99 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><h2>I. The decision of the Cologne Higher Regional Court<\/h2>\n<p>How is a resolution of a shareholders&#8217; meeting which breaches the Articles of Association of a GmbH qualified? The Cologne Higher Regional Court has answered this question in an almost textbook manner, continuing the jurisdiction of the highest court.<br \/>\nA notarized resolution of the shareholders\u2019 meeting of a GmbH was in question, by which the period of notice concerning the termination of the position as a shareholder of the company for the current shareholders was shortened to six months in deviation from the previous provision in the Articles of Association. With reference to this resolution, it should be reported to the commercial register that \u201csection 12 of the Articles of Association has been breached by resolution of the shareholder meeting dated [&#8230;]\u201d. The Register Court rejected the entry, as the resolution was not included word-for-word in the text of the Articles of Association.<br \/>\nIn the appeal proceedings, the Cologne Higher Regional Court shared the opinion of the Register Court. It showed that in the case of shareholder resolutions which deviate from the Articles of Association, a distinction had to be made between \u201cselective\u201d and \u201cstatus-establishing\u201d (i.e. resolutions establishing a permanent deviation from the Articles of Association) resolutions. While selective resolutions are effective, but still subject to appeal, resolutions establishing a permanent deviation from the Articles of Association would not be effective without compliance with the formal requirements applicable to an amendment to the Articles of Association. Such a decision establishing a permanent deviation from the Articles of Association is given in the present case because the decision is based on a permanent deviation from the provision concerning the termination of the position as a shareholder of the company for the current shareholders and therefore the relevant provisions for the company can no longer be found in the mere wording of the Articles of Association. Thus the notarial certification of the resolution as such which had a permanent effect was not sufficient, but in addition the complete new wording of the Articles of Association should have been attached to the application for registration in the commercial register pursuant to section 54 paragraph 1 sentence 2 GmbHG. <\/p>\n<h2>II. Selective and status-establishing resolutions<\/h2>\n<p>In general, a resolution deviates from the Articles of Association if it contains a provision that deviates from the wording of the Articles of Association, but without amending the wording of the Articles of Association itself. It is irrelevant whether the shareholders are aware that their resolution will lead to a breach of the Articles of Association or whether they intend to amend the Articles of Association. The assessment of the effectiveness of resolutions breaching the Articles of Association is controversial in case law and legal literature. A common feature of both opinions is that a fundamental distinction is made between resolutions on specific points and resolutions establishing a permanent deviation from the Articles of Association, as the Cologne OLG also stated in its decision.<\/p>\n<h5>1. Selective resolutions<\/h5>\n<p>A selective resolution exists if the deviation from the Articles of Association is limited to a specific individual case and therefore the effect of the resolution is limited to the respective measure. Examples of selective breaches of the Articles of Association are the exemption of a shareholder from the statutory prohibition of competition on a case-by-case basis or the approval of the transfer of shares by the shareholders\u2019 meeting instead of the supervisory board responsible for this by virtue of the Articles of Association.<br \/>\nIt is controversial and has not yet been clarified whether a selective resolution at least requires notarization. From one point of view, such a resolution can in any event be appealed if it is not certified by a notary. According to another opinion, such a resolution would be appealable in any event because it would be contrary to the Articles of Association. An affected shareholder may take action against a selective breach of the Articles of Association by way of an action of avoidance.<\/p>\n<h5>2. Status-establishing resolutions<\/h5>\n<p>A status-establishing resolution is given if a permanent deviation from the Articles of Association is established, which is not limited to only a specific measure. According to the case law of the Federal Court of Justice, a resolution which deviates permanently from the Articles of Association exists even if this deviation is limited to a certain period of time. The Court argues that third parties are otherwise incorrectly informed about the legal relationships of the company contrary to information given by the commercial register, the so called \u201cregister publicity\u201d.<br \/>\nIf, for example, a resolution stipulates that the managing directors are each authorized to represent the company on their own, although the text of the Articles of Association provides for joint representation, the resolution is to be qualified as status-establishing. Similarly, the appointment of managing directors or other members of corporate bodies who do not possess a corresponding qualification prescribed in the Articles of Association is to be assessed as a resolution which deviates permanently from the Articles of Association.<br \/>\nAccording to an opinion expressed in the legal literature, a resolution which deviates permanently from the Articles of Association should be effective if the formal requirements of section 53 paragraph 2 sentence 1 GmbHG have been observed, i.e. the resolution has been notarized. However, the German Supreme Court assumes in its jurisdiction that a resolution which deviates permanently from the Articles of Association is invalid if the Articles of Association are not amended and not filed with the Commercial Register in accordance with section 54 paragraph 1 sentence 2 GmbHG. The Cologne OLG also followed this opinion in its decision. If a shareholder wishes to take legal steps against a breach of the Articles of Association which deviates permanently from the Articles of Association, he can do so by an action for annulment<\/p>\n<h5>3. Borderline cases<\/h5>\n<p>The following examples show that it is not always easy to make a distinction between selective and status-establishing resolutions: Whereas according to one opinion  a resolution on the appropriation of profits for one fiscal year that deviates from the Articles of Association only  constitutes a selective breach of the Articles of Association, according to another opinion (including that of the Higher Regional Court of Dresden), however,  that has to be regarded as a resolution which permanently deviates from the Articles of Association. This latter view is based on the fact that provisions on the appropriation of profits pursuant to the Articles of Association are not limited to the specific measure but also affect the financial fiscal statements for the following year.<br \/>\nIf a managing director is appointed by the shareholders\u2019 meeting, but not by the body actually responsible to appoint the managing director according to the Articles of Association, such as the Supervisory Board or Advisory Board, according to one opinion this should only constitute a selective breach of the Articles of Association. This is justified by the fact that the authority actually responsible for appointing the managing director is not permanently denied. According to another opinion, however, this is qualified as a resolutionwhich establishes a permanent deviation from the Articles of Association: According to this, the breach of the Articles of Association is qualified as permanent because the managing director is in his position as managing director of the company for a longer period of time without having been appointed by the competent body of the company. <\/p>\n<h2>III. Conclusion and practical advice<\/h2>\n<p>In practice, it is often difficult to assess whether there is only a selective resolution or a resolution which permanently deviates from the Articles of Association. An incorrect qualification may result in the resolution being void and may therefore lead to an interim order by the Registration Court. Therefore, if there are doubts as to whether a resolution only selectively breaches the Articles of Association or establishes a permanent deviation, the regulations of the formal amendment of the Articles of Association pursuant to sections 53 and 54 GmbHG should be observed in any case, i.e. not only the notarization but also the corresponding application for entry in the commercial register including the amendment of the Articles of Association.<\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-9l7ugi-64edad64caf4467d6288e15a782a6df8\">\n.flex_column.av-9l7ugi-64edad64caf4467d6288e15a782a6df8{\nborder-radius:0px 0px 0px 0px;\npadding:7px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-9l7ugi-64edad64caf4467d6288e15a782a6df8 av_one_third  avia-builder-el-8  el_after_av_two_third  avia-builder-el-last  sy-only-desktop hide_on_print flex_column_div  column-top-margin'     ><p><div  class='avia-builder-widget-area 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alpha units'><div class='post-entry post-entry-type-page post-entry-3590'><div class='entry-content-wrapper clearfix'>\n","protected":false},"excerpt":{"rendered":"<p>In its decision dated 24 August 2018 (file no. 4 Wx 4\/18), the Cologne Higher Regional Court [OLG] had to deal with the effectiveness of shareholders\u2019 resolutions breaking through the Articles of Association at the limited liability company [GmbH]. The decision is an occasion to shed light on the consequences of shareholder resolutions that have a permanent effect under consideration of the provisions of sections 53, 54 German Limited Liability Companies Act [GmbHG].<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"mc4wp_mailchimp_campaign":[],"footnotes":""},"categories":[138],"tags":[],"class_list":["post-3590","post","type-post","status-publish","format-standard","hentry","category-2019-q2-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts\/3590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/comments?post=3590"}],"version-history":[{"count":4,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts\/3590\/revisions"}],"predecessor-version":[{"id":3596,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts\/3590\/revisions\/3596"}],"wp:attachment":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/media?parent=3590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/categories?post=3590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/tags?post=3590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}