Asset Deal in a German GmbH: Notarised Shareholders’ Resolution Needed?

By Dr Angelika Baumhof and Christian Pflaeger, Jakoby Dr. Baumhof

On 08 January 2019, the German Federal High Court of Justice (II ZR 364/18) ruled that an agreement about the sale of all or substantially all of the assets of a GmbH requires a shareholders’ resolution of approval; however, this resolution does not need to be notarised. Meanwhile the need for notarisation is basically argued in two cases. The first is if the asset deal leads to a direct or indirect dilution of the shareholders’ participation in the company. In such a situation it is argued that a notarised resolution of approval to an asset deal is required due to the seriousness of such measures. This derives from the leading Holzmüller decision of the German Federal High Court of Justice concerning stock corporation law.

The second is if the asset deal leads to a change of the business purpose in the company, especially if the company continues to exist and therefore changes its business purpose. Such a change of the business purpose needs an amendment to the articles of association pursuant to §53 GmbHG (Limited Liability Companies Act) with a notarised shareholders’ resolution. The costs for the notarisation of the shareholders’ resolution of approval of the asset deal depend on the purchase price, while the costs for an amendment of the articles of association are calculated only on the share capital of the company, which tends to be much lower.

Therefore, changing the articles of association before the asset deal should be considered in order to avoid a notarisation of the shareholders’ resolution of approval. This needs to be organised well ahead of the asset deal since the change only becomes valid after registration in the commercial register. If the future business purpose of the company is uncertain, a possible amendment is to add asset-management activities as a general purpose.

Published: Debt Collection, Restructuring & Insolvency Newsletter, No. 12, Spring 2020 l Photo: irakite - stock.adobe.com