Corporate Law

Question 1

Which legal form is right for my company (GmbH, UG, GbR)?

Accepted Answer

This depends mainly on liability risk, capital requirements, number of partners, and financing plans. For liability-intensive business models or investor entry, a GmbH is often chosen; for a quick start with lower share capital, the UG (limited liability) can be an intermediate model often later upgraded to a GmbH. With GbR/partnerships, formation is straightforward but shareholders typically face personal liability. A structured assessment early on is worthwhile because the legal form directly influences future financing, governance, and contract structure.

Question 2

What must be in the articles of association of a GmbH/UG – and what should be additionally regulated?

Accepted Answer

Mandatory contents include company name, registered office, corporate purpose, share capital, and shareholdings. In practice, the 'optionally' configurable points are particularly important: voting rights, resolution majorities, approval requirements, transfer restrictions, rights of first refusal, redemption/exclusion, non-compete clauses, and deadlock mechanisms. It is often advisable to enter into a shareholders' agreement alongside the articles to regulate matters not necessarily visible in the register, or that should be adjusted more flexibly.

Question 3

Which shareholder resolutions are particularly prone to error?

Accepted Answer

Typically error-prone are resolutions on the appointment/removal of managing directors, profit distribution, capital increases, amendments to the articles, and measures subject to approval. Errors frequently occur in form, convocation, quorum, majority requirements, or conflicts of interest. Such deficiencies can lead to contestability or – in serious cases – nullity, which can block transactions and financing steps.

Question 4

When does a managing director face personal liability?

Accepted Answer

A managing director is liable to the company for breaches of duty. Critical practical areas include: insolvency and the obligation to file for insolvency in a timely manner; payments after insolvency; violations of duty of care and organizational obligations (e.g., lack of oversight, no documentation of key decisions); and in certain situations, tax or social security obligations. Sound risk management with clear responsibilities and documentation significantly reduces liability risks.

Question 5

Can a shareholder be excluded or their shares redeemed?

Accepted Answer

Yes, but only under clear conditions. Possible mechanisms include redemption clauses in the articles or exclusion mechanisms, often tied to important grounds such as serious breach of duty. The compensation arrangement is also central, as it is frequently a source of dispute. Without a proper basis in the articles, exclusion/redemption is contestable and quickly escalates.

Question 6

When should I engage a corporate law attorney?

Accepted Answer

Typically at structural moments: formation, admission of new shareholders or investors, amendments to the articles, change of managing director, share transfers, or shareholder disputes. The earlier the structure is sound, the fewer conflict and transaction risks arise later — particularly before financing rounds or company sales.

Question 7

What does corporate law advice cost – are fixed fees available?

Accepted Answer

For clearly defined services (e.g., articles review, managing director contract, shareholder agreement, formation package), fixed fees are often possible. For more complex matters (disputes, restructuring, transactions), billing by time or as a project budget is standard. What matters is a clear scope definition: what is being reviewed or created, how many rounds of negotiation are included, and what consultations are planned.

Question 8

Accepted Answer

Corporate Law

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