Creditor protection Archives - ℄ Real Estates Tue, 01 Mar 2022 15:16:29 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.5 Limitation of liability for AG bodies (internal relationship) https://lukinski.com/limitation-of-liability-for-ag-bodies-internal-relationship/ Mon, 08 Mar 2021 15:24:26 +0000 https://lukinski.de/limitation-of-liability-for-ag-bodies-internal-relationship/ Limitation of liability for AG executive bodies – In the event of a loss, the stock corporation as a legal entity under private law is, to a certain extent, subject to a limitation of liability, because the liability – apart from a few rare exceptions – exclusively burdens the business assets of the company. In […]

Der Beitrag Limitation of liability for AG bodies (internal relationship) erschien zuerst auf ℄ Real Estates.

]]> Limitation of liability for AG executive bodies – In the event of a loss, the stock corporation as a legal entity under private law is, to a certain extent, subject to a limitation of liability, because the liability – apart from a few rare exceptions – exclusively burdens the business assets of the company. In the external relationship, therefore, only the share capital is liable for any losses. In the internal relationship, on the other hand, the liability claim can vary depending on the executive body of the AG. Here you can find all legal forms and here you can go back to the overview AG.

Limitation of liability for AG bodies

In principle, it is possible to arrange for a limitation of the liability of an AG in the internal relationship. Such a limitation is, for example, the requirement of approval by shareholders, according to which particularly risky projects are to be supported and approved by the shareholders. This spreads the liability risk and relieves members of the management board plus members of the supervisory board.

Alternatively, agreements can be made regarding the limitation of claims. However, the protection of creditors must not be violated by law, which is why this form of limitation of liability does not offer comprehensive legal certainty. In all simplicity, however, it is also possible for shareholders to express a waiver of the liability of the supervisory board and management board in a shareholders’ resolution. However, such a resolution may not be adopted before the end of the third year after the liability claim has arisen.

Limitation of liability in the internal relationship of the AG:

  • Shareholder approval
  • Covenant
  • Waiver of liability by resolution

Liability of the Management Board – breaches of the duty of care

As the management body, the management board takes over the operational business and enjoys a great deal of freedom with regard to the management of the company. This requires a high degree of trust on the part of the other executive bodies, which is why the management board is subject to a duty of care as a basis for liability: After all, it works with the shareholders’ deposits and not with its own finances! Accordingly, the management board is liable for breaches of the duty of care imposed on it and for criminal offences. In the event of liability claims, the management board is held liable by the supervisory board.

Liability of the Supervisory Board – Breaches of Principle & Principle of Confidence

The supervisory board is also subject to a duty of care – more precisely: the principle of careful and orderly management – and must act in accordance with the principle of trust vis-à-vis the management board. It is liable to the stock corporation and its shareholders for damages caused by financial losses, but also to third parties insofar as they are affected by a culpable act on the part of the supervisory board.

Liability of shareholders – individual liability & pass-through liability

Each shareholder is individually liable to the extent of the shares he holds. Creditors can therefore in principle not encumber his private assets should the value of his contributions be insufficient. The only exception to this rule is the so-called “pass-through liability”, in which the strict separation between business and private assets can be waived under certain circumstances. An assessment in this regard must be determined by the respective competent court.

Establish a GmbH: Legal form and alternatives

  1. Limited liability company (GmbH)
  2. Special case: Real estate GmbH
  3. Legal forms: List

Limited liability company (GmbH)

Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH) – The limited liability company is a German legal form that is founded by at least one person and managed by at least one shareholder. As the name already indicates, this corporate legal form is characterized by a limitation of liability for its shareholder(s).

Special case: Real estate GmbH

Immobilien GmbH / Vermögensverwaltende GmbH / Immobiliengesellschaft – In this article you will learn the basics about real estate companies. Who would think of founding a limited liability company when buying a house or a condominium? Admittedly, this makes no sense for owner-occupation, but it does for renting.

Here you will find all the legal forms that can be chosen as a founder in Germany and a guide with a checklist:

Legal forms: List

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

Der Beitrag Limitation of liability for AG bodies (internal relationship) erschien zuerst auf ℄ Real Estates.

]]> Organs of a GmbH – managing director, supervisory board & company meeting https://lukinski.com/organs-of-a-gmbh-managing-director-supervisory-board-company-meeting/ Mon, 08 Mar 2021 14:48:20 +0000 https://lukinski.de/organs-of-a-gmbh-managing-director-supervisory-board-company-meeting/ A limited liability company consists of several bodies. The managing directors deal with the day-to-day business and other matters of the company and represent their company externally in accordance with the GmbHG. The supervisory board is required by law above a certain number of employees and acts as a controlling body of the company by […]

Der Beitrag Organs of a GmbH – managing director, supervisory board & company meeting erschien zuerst auf ℄ Real Estates.

]]> A limited liability company consists of several bodies. The managing directors deal with the day-to-day business and other matters of the company and represent their company externally in accordance with the GmbHG. The supervisory board is required by law above a certain number of employees and acts as a controlling body of the company by appointing and advising the management, but also by monitoring and, in case of doubt, dismissing it. Alternatively, its establishment can also be determined within the framework of the articles of association. The shareholders’ meeting acts as the decision-making body of the GmbH. Here you can find all legal forms and here, you can go back to the overview GmbH.

Organs of a GmbH – management, control & resolution

A limited liability company can only function if all its bodies work together. This requires a high level of trust and an equally high level of reliability for the individual shareholders.

Managing Director – The Management Body

A GmbH has at least one managing director who, according to his employment, is characterised by a management authority in the internal relationship and a power of representation in the external relationship. This can be one of the GmbH shareholders – one then also speaks of shareholder managing directors – but does not have to be. The term of office is not limited in time.

Supervisory Board – The supervisory body + Labour Director

The composition of the supervisory board is prescribed in different legal sources depending on the number of employees of a company. A supervisory board consists of both members of the company – i.e. the shareholders – and employees, with all members of the supervisory board having the same rights and obligations.

If the company has fewer than 500 employees, the law does not require the establishment of a supervisory board. In this case, the GmbH may decide for itself whether or not a supervisory body appears to make sense for the company from a situational point of view.

One-Third Participation Act for more than 500 employees

If there are more than 500 employees, the One-Third Participation Act (DrittelbG) comes into play. This limits the supervisory board to a minimum of three and a maximum of 21 council members. The size of the supervisory board is directly related to the size of the company. As the name of the law suggests, one third of the supervisory board must be made up of employees, who are elected as employee representatives by the entire workforce in a ballot.

Montan Co-Determination Act for more than 1,000 employees (coal and steel industry)

Coal and steel companies with more than 1,000 employees are subject to the Coal and Steel Co-Determination Act (Montan-MitbestG). Companies that are active in mining and the iron and steel producing industry are considered to be part of the coal and steel industry. The supervisory board is formed on an equal footing between the employer side and the employee side. In addition, the so-called “neutral man” is appointed. As a rule, the supervisory board consists of eleven members – depending on the share capital, it can be expanded to 15 or 21 members if necessary. Furthermore, there is a requirement to appoint an equal member to the Board of Management as Director of Labor Relations. All members of the Supervisory Board are elected at the Company’s Annual General Meeting, taking into account the proposals made by the Works Council.

Co-determination Act for more than 2,000 employees

In the case of more than 2,000 employees, on the other hand, the German Co-Determination Act of 1976 (MitbestG) applies. Accordingly, the supervisory board is composed of equal numbers of employees and shareholders. The shareholders’ side provides the chairman of the supervisory board, who may make use of his double vote in the event of a stalemate. In addition, an equal member must be appointed to the management board to take the position of labor director. Depending on the size of the company, between twelve and 20 supervisory board members may be appointed according to the MitbestG. If the GmbH does not have more than 8,000 employees, the election takes place directly; in all other cases, the election is conducted by secret ballot and is subject to the principles of proportional representation.

Shareholders’ meeting – The decision-making body

A shareholders’ meeting is convened by registered letter from the managing director(s). During the meeting, the GmbH shareholders can discuss and vote on important matters of the company, which is why the shareholders’ meeting is also defined as a decision-making body. Each shareholder receives votes in proportion to his share in the company. Thereby, the shareholder is granted one vote per 50 Euros.

Establish a GmbH: Legal form and alternatives

  1. Limited liability company (GmbH)
  2. Special case: Real estate GmbH
  3. Legal forms: List

Limited liability company (GmbH)

Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH) – The limited liability company is a German legal form that is founded by at least one person and managed by at least one shareholder. As the name already indicates, this corporate legal form is characterized by a limitation of liability for its shareholder(s).

Special case: Real estate GmbH

Immobilien GmbH / Vermögensverwaltende GmbH / Immobiliengesellschaft – In this article you will learn the basics about real estate companies. Who would think of founding a limited liability company when buying a house or a condominium? Admittedly, this makes no sense for owner-occupation, but it does for renting.

Here you will find all the legal forms that can be chosen as a founder in Germany and a guide with a checklist:

Legal forms: List

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

Der Beitrag Organs of a GmbH – managing director, supervisory board & company meeting erschien zuerst auf ℄ Real Estates.

]]> Value added tax (VAT) simply explained: amount, delivery & service – “VAT” for companies https://lukinski.com/value-added-tax-vat-simply-explained-amount-delivery-service-vat-for-companies/ Mon, 08 Mar 2021 14:05:15 +0000 https://lukinski.de/value-added-tax-vat-simply-explained-amount-delivery-service-vat-for-companies/ Value added tax – Most legal forms of business are subject to tax. Depending on the legal form, income tax, corporate income tax, sales tax, trade tax and/or capital gains tax are due by law. Under certain circumstances, it is possible for some companies to be exempt from one or more of these types of […]

Der Beitrag Value added tax (VAT) simply explained: amount, delivery & service – “VAT” for companies erschien zuerst auf ℄ Real Estates.

]]> Value added tax – Most legal forms of business are subject to tax. Depending on the legal form, income tax, corporate income tax, sales tax, trade tax and/or capital gains tax are due by law. Under certain circumstances, it is possible for some companies to be exempt from one or more of these types of tax. What is the value added tax? What is the difference between VAT and sales tax? What is sales tax, simply explained? An overview! Back to: Taxes.

Value added tax (VAT) – tax for delivery & service

Value added tax – VAT for short – is usually levied on all turnover generated by a company in Germany for VAT purposes. This includes all supplies and services – as well as occasional ancillary transactions – that the company provides against payment as part of its business activities. VAT amounts that a company has paid for supplies and services it has received and that can be substantiated can be claimed as input tax deductions and thus reduce the entrepreneur’s VAT burden.

From an economic point of view, the own turnover tax thus represents a general consumption tax, but in Germany it ultimately functions as a transfer tax and is ultimately charged to the end consumer. Because it is passed on, sales tax is typically classified as an indirect tax. Currently, the standard German VAT rate is 19 percent – 7 percent on reduced goods – and is one of the main sources of revenue for financing the federal budget.

Other taxes for businesses:

If you want to learn more specifically about taxes for real estate companies, you can learn more here:

Which companies are subject to VAT?

Most companies do not only carry out tax-exempt turnover and are therefore naturally burdened with turnover tax. Therefore, this type of tax is basically relevant for all common legal forms of companies, starting with sole proprietorships (EU) and BGB companies (GbR)… to the general partnerships (OHG) and limited partnerships (KG)… to the limited liability companies (GmbH) as well as the stock corporations (AG).

In common parlance, the term value added tax – VAT for short – is often used and is sometimes also indicated on invoices or receipts. The name comes from the understanding that a tax is levied in trade and production at several stages of the value chain, whereas VAT uses the turnover generated from a sale or in a similar way as the basis of assessment. In purely fiscal terms, however, the term value added tax is no longer used in Germany; instead, there is talk of a sales tax with input tax deduction.

Overview of company law forms

You can find more information about the different legal forms under the following links. Starting with the sole proprietorship and the registered traders… to the various partnerships and corporations… to other companies such as the family foundation – all the essential aspects of formation, liability, tax burden and more explained simply and understandably! First of all, an overview of the individual legal forms of companies:

Taxes in Germany: List

Corporation tax (KSt), income tax (ESt), capital gains tax (KapESt), turnover tax (USt), trade tax (GewSt) – who pays what? In this overview of the different types of taxes / tax forms in Germany, you will find relevant taxes for you as an individual and for your business, depending on which legal form you have chosen. Also, after the tax list: How does the tax cycle work around month-end closing, year-end closing and balance sheet? A little insight for those starting their first company. What taxes are there? Simple explanations, definitions, tax optimization, an insight into taxes.

Der Beitrag Value added tax (VAT) simply explained: amount, delivery & service – “VAT” for companies erschien zuerst auf ℄ Real Estates.

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