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Corporate law in Germany
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Legal Information
The German stock cooperation (AG)
Like the German GmbH, the German AG can be established for any legally permissible purpose by one or more persons. A distinction is made between listed and unlisted stock corporations. Companies listed on the stock exchange are companies whose shares of stock are admitted to trading on a market that is regulated and monitored by officially recognised bodies and that is indirectly or directly accessible to the general public.
The registered office of the AG must be in Germany. Foreigners can also be members of the executive board or the supervisory board of a German AG. They do not have to have a domicile or habitual residence in Germany.
The minimum nominal amount of the share capital is fifty thousand euros. The company assets alone shall serve to discharge the company’s obligations vis-à-vis its creditors. The organs of the AG are the shareholders‘ meeting, the executive board and the supervisory board.
The management of the German stock cooperation (AG)
The affairs of the company are managed by the management board on its own responsibility. The management board may consist of one or several persons. In the case of companies having a share capital of more than three million euros, the management board is to be comprised of at least two persons. Where the management board consists of several persons, any and all members of the management board shall have authority to manage the affairs of the company only jointly. In der Satzung kann vorgesehen werden, dass ein einzelnes Vorstandsmitglied zur Einzelvertretung befugt ist.
The management board shall represent the company before the courts and outside of court. It is not possible to restrict the power of representation of the management board.
Members of the management board are appointed by the supervisory board for a maximum term of five years. A re-appointment or extension of the term of office, in each case for a maximum of five years, is possible. The supervisory board may revoke the appointment as member of the management board only for grave cause. Members of the management board acting in dereliction of their duties are liable as joint and several debtors to compensate the company for any damage resulting therefrom.
The power of representation can be restricted by the articles of association or by resolutions passed by the shareholders. The directors are obligated vis-à-vis the company to observe those restrictions, a restriction of the directors’ power to represent the company has no legal effect in respect of third persons. The directors conduct the company’s affairs. They are obligated to ensure proper book-keeping for the company. The directors of the German GmbH are liable to the company for any damage arising from their activities.
The Supervisory Board of the German stock cooperation (AG)
The members of the supervisory board are elected by the general meeting. They ca be removed from office prior to expiry of their term by a resolution of the general meeting. The resolution adopted by the general meeting requires a majority comprising at least three quarters of the votes cast. A member of the supervisory board may not concurrently be a member of the management board.
The supervisory board has to supervise the management board. The supervisory board has the right to inspect and audit the books and records of the company as well as its assets.
The general meeting of the German stock cooperation (AG)
At the general meeting, the shareholders exercise the rights arising from their position as shareholders. These include, for example:
1. The appointment of members of the supervisory board,
2. The appropriation of the net income;
3. The approval of the actions taken by the members of the management board and of the supervisory board and the granting of discharge to them;
4. The appointment of the auditor of the annual accounts;
5. Amendments of the by-laws;
The stockholders have the right to request information concerning matters pertaining to the company. If the provision of the information, is suited to cause a insignificant disadvantage to the company the management board may refuse a request for information.
You want to know more about the liability, rights and obligations of the corporate bodies
of a German stock corporation? Get in touch with us! Our specialist lawyers for commercial and corporate law will advise you on all questions concerning the German stock cooperation (AG) and its management.
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