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Corporate law in Germany
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Legal Information
Shareholder dispute in the German limited liability company (GmbH)
Conflicts between shareholders of a limited liability company can bring the company to a veritable crisis. It is therefore all the more important to solve problems quickly and, if necessary, to implement provisional measures to safeguard the company’s interests.
The Strategy in the shareholder dispute
A shareholder dispute is often settled with a contractual shareholder agreement. In the first phase, the goal should be to consistently explore the possibilities of reaching an agreement. However, since a long-lasting conflict only aggravates the crisis of the company, this phase should lead to a result as soon as possible. If no agreement is foreseeable, the dispute must be resolved in court. It is then still possible that a settlement will be reached in court. In all cases it is essential to pursue a clear strategy. This can only be developed by those who know their rights and obligations down to the last detail and who prepare thoroughly for shareholder meetings, negotiations and legal disputes.
How to behave at shareholders' meetings
With the right resolutions and the right voting behaviour, positions can be strengthened and legal proceedings can be prepared. Conversely, resolutions that weaken one’s own legal position must be reviewed and, if necessary, challenged by means of an action for annulment. It is equally important to include the positions of other stakeholders such as the other shareholders or the management in the strategic considerations. Clear and consistent action is essential in a shareholder dispute. Depending on the situation, the resolution of the dispute may require the quick and uncompromising safeguarding, enforcement and defence of claims, or it may require negotiations or mediation.
The expulsion of a shareholder
Often the dispute comes to a head to the point of the compulsory expulsion of a shareholder. If there is good cause, a shareholder can be excluded from the company by resolution if the articles of association contain a corresponding redemption provision. Likewise, an action for exclusion may be considered if the articles of association do not contain a redemption provision.
You are in dispute with your shareholders or you want to prevent a shareholder dispute? We will support you. Our specialist lawyers for German commercial and corporate law will develop the right strategy for you and assert your shareholder rights for you. Do not hesitate to contact us!
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