Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Subchapter 7
Special audit. Assertion of claims to compensation
Section 142
Appointment of special auditors
(1) The general meeting may appoint auditors (special auditors) by a simple majority of the votes cast in order to audit the actions taken and events occurring at the company’s formation or occurring in the course of the management of the company’s affairs, particularly also in the case of measures serving the procurement of capital and the reduction of capital. In adopting the resolution, a member of the management board or of the supervisory board may not participate in the vote, neither for himself nor on behalf of some other party, where the audit is to cover actions and events that are connected to the approval of the actions taken by a member of the management board or of the supervisory board and discharge granted to same, or connected to the initiation of a legal dispute between the company and a member of the management board or of the supervisory board. The voting right of a member of the management board or of the supervisory board that may not participate in the vote pursuant to the second sentence may not be exercised by some other party on behalf of such member, either.
(2) Where a motion for the appointment of special auditors to audit an action taken or event occurring at formation, or an action taken or event occurring in the course of the management of the company’s affairs that is not more than five (5) years in the past, is not carried at the general meeting, the court is to appoint special auditors upon a corresponding petition being filed by stockholders whose shares of stock, in the aggregate, are at least equivalent to one hundredth of the share capital, or to a stake of 100 000 euros, at the time the petition is filed, if there are facts justifying the suspicion that the action taken or event occurring involved dishonest conduct or gross violations of the law or of the by-laws; this shall also apply to actions and events in the past, provided they are not more than ten (10) years in the past, if the company was listed on the stock exchange at the time such actions were taken or events occurred. The petitioners are to submit proof of their having been holders of the shares of stock since at least three (3) months prior to the date of the general meeting, and of their continuing to hold the shares until a decision is taken regarding their petition. Section 149 shall apply mutatis mutandis to an agreement concluded in order to avoid such a special audit.
(3) Subsections (1) and (2) shall not apply to actions and events that may be the subject of special audits pursuant to section 258.
(4) Where the general meeting has appointed special auditors, the court is to appoint some other special auditor upon a corresponding petition being filed by stockholders, whose shares of stock, in the aggregate, are at least equivalent to one hundredth of the share capital, or to a stake in same of 100 000 euros, at the time the petition is filed, if this seems to be required for cause given in the person of the special auditor appointed; this shall be the case in particular if the special auditor appointed does not have the knowledge required for dealing with the subject to be addressed by the special audit, if there is the fear of his being biased, or if there are concerns regarding his reliability. The petition is to be filed within two (2) weeks of the date of the general meeting.
(5) Besides hearing the parties involved, the court is to also hear the supervisory board and, in the case governed by subsection (4), the special auditor appointed by the general meeting. A complaint may permissibly be lodged against the decision taken. The regional court (Landgericht) in the judicial district of which the company has its seat shall hand down the decision regarding the petition pursuant to subsections (2) and (4).
(6) The special auditors appointed by the court are entitled to reimbursement for their reasonable cash expenditures and to remuneration for their activities. The court shall establish the expenditures and the remuneration. A complaint may permissibly be lodged against the decision taken; filing a complaint on points of law is precluded. Based on the decision taken, compulsory enforcement may be pursued in accordance with the Code of Civil Procedure (ZPO).
(7) Where the company has issued securities in the sense of section 2 (1) of the Securities Trading Act (WpHG) that are admitted to trading on a regulated market at a stock exchange within Germany, then the management board, in the case governed by subsection (1), first sentence, and in the case governed by subsection (2), first sentence, the court is to inform the Federal Financial Supervisory Authority (BAFin) of the appointment of the special auditor and of his audit report; additionally, the court is to inform BAFin of any petition for the appointment of a special auditor that it may receive.
(8) Unless stipulated otherwise by the present Act, the court proceedings pursuant to subsections (2) to (6) shall be governed by the regulations of the Act on Proceedings in Family Matters and in Matters of Non-contentious Jurisdiction (FamFG).
Section 143
Selection of special auditors
(1) Solely the following should be appointed as special auditors where the subject to be addressed by the special audit does not require any other knowledge:
1. Persons having sufficient prior training and experience in accounting;
2. Auditing firms, provided that at least one of their legal representatives has sufficient prior training and experience in accounting.
(2) No-one may be a special auditor who is prohibited from being an auditor of annual accounts pursuant to section 319 subsections (2) and (3), section 319a (1), section 319b of the Commercial Code (HGB), or who should have been prohibited from being an auditor of annual accounts during the time in which the actions were taken and events occurred that are to be audited. An auditing firm may not serve as special auditor that is prohibited from being an auditor of annual accounts pursuant to section 319 subsections (2) and (4), section 319a (1), section 319b of the Commercial Code (HGB), or that should have been prohibited from being an auditor of annual accounts during the time in which the actions were taken and events occurred that are to be audited.
(3) (repealed)
Section 144
Liability and responsibilities of the special auditor
Section 323 of the Commercial Code (HGB) regarding the liability and responsibilities of the auditor of the annual accounts shall apply mutatis mutandis.
Section 145
Rights of the special auditors. Audit report
(1) The management board is to allow the special auditors to audit the books and records of the company as well as its assets, particularly the company’s cash and the inventory of securities and goods.
(2) The special auditors may demand that the members of the management board and of the supervisory board provide them with all clarification statements and proof as may be required in order for the actions and events to be audited with due diligence.
(3) The special auditors have the rights pursuant to subsection (2) also vis-à-vis a group member company as well as vis-à-vis a controlled or controlling enterprise.
(4) Upon a corresponding petition being filed by the management board, the court is to allow certain facts to not be addressed in the report where this is mandated by the company’s overriding interests and where such facts are not indispensable for submitting to the court the dishonest conduct or gross violations pursuant to section 142 (2).
(5) The regional court (Landgericht) in the judicial district of which the company has its seat shall hand down the decision regarding the petition pursuant to subsection (4). Section 142 (5), second sentence, and subsection (8) shall apply mutatis mutandis.
(6) The special auditors are to submit a written report on the results of their audit. The audit report must also address any facts that are suited, upon becoming known, to cause a greater than insignificant disadvantage to the company or an affiliated enterprise, if knowledge of same is necessary in order for the general meeting to adjudge the action or event to be audited. The special auditors are to sign the report and are to submit it, without undue delay, to the management board and the Commercial Register at the company’s seat. Upon a corresponding demand being made, the management board is to provide each stockholder with a copy of the audit report. The management board is to submit the report to the supervisory board and is to publish it by notice in the invitation convening the next general meeting as an item of business set out in the agenda.
Section 146
Costs
Where the court appoints special auditors, the company shall bear the court costs and the costs of the audit. Where the petitioner has obtained such appointment of special auditors by intentionally or grossly negligently making inaccurate submissions to the court, the petitioner is to reimburse the company for the costs.
Section 147
Assertion of claims to compensation
(1) The company’s claims to compensation arising from its formation against the persons obligated pursuant to sections 46 to 48 and section 53, or arising from the management of its affairs against the members of the management board and of the supervisory board, or arising from section 117, must be asserted if the general meeting so resolves by a simple majority of the votes cast. The claim to compensation should be asserted within six (6) months of the date of the general meeting.
(2) The general meeting may appoint special representatives for the purpose of asserting the claim to compensation. Upon the corresponding petition being filed by stockholders whose shares of stock, in the aggregate, are at least equivalent to one tenth of the share capital, or to a stake in same of one million euros, the court (section 14) is to appoint persons as representatives of the company for the purpose of asserting the claim to compensation other than the persons appointed as representatives of the company pursuant to sections 78 and 112 or pursuant to the first sentence of this provision, where the court holds that this is suitable for the proper assertion of such claims. Where the court finds for the petitioner, the company shall bear the court costs. A complaint may permissibly be lodged against the decision taken. The court-appointed representatives may demand reimbursement from the company for their reasonable cash expenditures and remuneration for their activities. The court shall establish the expenditures and the remuneration. A complaint may permissibly be lodged against the decision taken; filing a complaint on points of law is precluded. Based on the decision taken, compulsory enforcement may be pursued in accordance with the Code of Civil Procedure (ZPO).
(3) (repealed)
(4) (repealed)
Section 148
Proceedings for leave to bring an action
(1) Stockholders, whose shares of stock, in the aggregate, are at least equivalent to one hundredth of the share capital, or to a stake in same of 100 000 euros, at the point in time at which the petition is filed, may file a petition for leave to assert, in their own name, the company’s claims to compensation set out in section 147 (1), first sentence. The court shall permit such an action to be brought if:
1. The stockholders provide proof that they have purchased the shares of stock prior to the point in time at which they or, in the case of universal succession, their predecessors in title had reason to become aware, due to a publication, of the alleged derelictions of duty or the alleged damage;
2. The stockholders provide proof that they have called on the company to itself bring an action, setting a reasonable period, but that this was to no avail;
3. Facts are given that justify the suspicion that the company may have suffered damage by dishonest conduct or gross violations of the law or the by-laws; and
4. No overriding grounds in terms of the company’s best interests contravene the assertion of the claim to compensation.
(2) That regional court (Landgericht) in the judicial district of which the company has its seat shall decide on the petition for leave to bring an action by handing down a court order. Where a division for commercial matters has been formed at the regional court, this shall take the decision instead of the civil division. Where this serves to ensure uniform adjudication, the Land government may transfer the decision, by an ordinance having the force of law for the judicial districts of several regional courts, to one of the regional courts. The Land government may transfer the authorisation to the Land department of justice. The filing of the petition shall suspend the period of prescription applying to the claim that is the subject of the dispute until the petition has been dismissed and this dismissal has become final and conclusive, or until the period set for bringing the action has expired. Prior to its decision, the court is to give the respondent the opportunity to state its position. An immediate complaint may be lodged against the decision. Filing a complaint on points of law is precluded. The company is to be summoned to attend the proceedings concerning leave to bring an action, and the proceedings concerning the action itself, as an interested third party whose rights may be affected.
(3) The company shall be entitled, at any point in time, to itself assert the claim to compensation before the courts; upon the company bringing the action, any pending proceedings concerning leave to bring an action, or any pending proceedings concerning the action itself, that are pursued by stockholders regarding this claim to compensation shall become inadmissible. The company shall be entitled, at its election, to accede to pending proceedings of the action concerning its claim to compensation in the status which the proceedings have reached at the time the company accedes to them. In the cases governed by the first and second sentences, the current petitioners or plaintiffs shall be summoned to attend the proceedings as an interested third party whose rights may be affected.
(4) Where the court has found for the petitioner, the action may only be brought before the court having jurisdiction pursuant to subsection (2) within three (3) months of the decision having become final and conclusive and provided the stockholders have once again called on the company to itself bring an action, setting a reasonable period, but to no avail. The action is to be brought against the persons named in section 147 (1), first sentence, demanding that performance be provided to the company. An intervention by the stockholders as joint parties shall no longer be possible once leave has been granted to bring the action. Several actions are to be consolidated such that their hearings for oral argument and the decisions taken by the court coincide.
(5) The judgment shall take effect, even in those cases in which it dismisses the complaint, for and against the company and the remaining stockholders. This shall apply mutatis mutandis to any compromise to be published by notice pursuant to section 149; however, it shall take effect for and against the company only after leave has been granted to bring an action.
(6) Insofar as the petition brought by the petitioner is dismissed, he is to bear the costs of the proceedings for leave to bring an action. Where the dismissal is based on grounds contravening the action that concern the company’s best interests and that the company could have provided prior to the petition being filed, but failed to so provide, then the company is to reimburse the petitioner for the costs. In all other cases, the final judgment is to allocate the costs. Where the company itself brings an action, or where it accedes to pending proceedings of an action brought by stockholders, then it shall bear any costs the petitioner may have incurred up until the point in time at which the company brought the action or acceded to the proceedings; the company may withdraw the action only subject to the pre-requisites set out in section 93 (4), third and fourth sentences, to the exception of the blocking period. Where the action is dismissed, as a whole or in part, the company is to reimburse the plaintiffs for the costs they are to bear, unless the plaintiffs have obtained leave to bring an action by intentionally or grossly negligently making inaccurate submissions to the court. Stockholders acting jointly as petitioners or as joined parties shall be reimbursed overall only for the costs of one (1) authorised representative, unless involving a further authorised representative was indispensable for bringing the action.
Section 149
Notices published regarding a liability action
(1) Once leave has been granted to bring an action pursuant to section 148 and this leave has become final and conclusive, the company listed on the stock exchange is to give notice, without undue delay, of the petition requesting leave and of the termination of the proceedings in the company’s publications of record.
(2) The notice as to the proceedings having been terminated is to set out the nature of the proceedings, all agreements connected to it, including any collateral agreements made, citing their full wording as well as the names of the parties involved. Any performance by the company and any performance by third parties to be attributed to the company are to be separately described and set out prominently. In order for the performance obligations to enter into effect, the notice must be full and complete. The validity of procedural measures serving to bring the proceedings to an end shall remain unaffected. Claims may be made for the recovery of any performance provided in spite of the invalidity.
(3) The above provisions shall apply mutatis mutandis to agreements concluded in order to avoid court proceedings.
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