GmbH (private limited company) shareholders’ meetings and resolutions – Exemptions in 2020

Starting position – legal principles up to now

The resolutions of the shareholders of a GmbH are passed at meetings. Physical presence is generally required. According to the German Limited Liability Companies Act, physical meetings do not have to take place if all shareholders have declared in writing that they agree with the resolution to be taken or agree to vote in writing. The company agreement of a GmbH may differ from statutory provisions and establish prerequisites for assembling and passing resolutions at shareholders’ meetings outside of a session with individuals who are physically present.

Simplifications under the COVID-19 Mitigation Act

(1) Passing resolutions – Based on the new statutory provisions, the resolutions of the shareholders can be passed in writing or voted on in writing even without the agreement of all the shareholders. Consequently, the statutory requirement to have the approval of all the shareholders for passing a resolution in writing does not apply. This is true for both voting in writing as well as written resolutions.

Interim conclusion – It is now also possible to pass resolutions, even without the approval of all the shareholders and without the respective provisions in the articles of association, by way of a circulation procedure or by e-mail so long as approval is given by a simple majority or other type of majority provided for in the articles of association.

(2) Resolutions that require notarisation have been excluded – The simplifications described above do not apply to resolutions that require notarisation. Such resolutions have to be passed at an assembly, before a notary, that people attend in person or through voting that is separately certified by a notary.

(3) Specials rules for the registration of reorganisations – For mergers and reorganisations in 2020, a cut-off date for the preparation of the final balance sheet of the transferring legal entity that is twelve months before the date of registration with the commercial register court will be considered acceptable. (Re)structurings will be able to take place later in 2020 as a result of the extension of the eight-month deadline – as provided for under Section 17(2) of the German Reorganisation Act – to twelve months.

Advice: Irrespective of the provisions of the COVID-19 Mitigation Act, the other requirements with respect to majorities for passing resolutions – such as, for example, the regulations provided for in the articles of association relating to the deadline for invitations and the presence of a quorum – continue to apply.