Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Part 5
Accounting. Appropriation of profits
Chapter 1
Annual accounts and management report
Section 150
Statutory reserves. Capital reserves
(1) Statutory reserves are to be formed on the balance sheet of the annual accounts to be drawn up pursuant to sections 242 and 264 of the Commercial Code (HGB).
(2) One twentieth of the surplus for the year, reduced by any loss carried forward from the preceding year, is to be allocated to the statutory reserves, until the statutory reserves and the capital reserves pursuant to section 272 (2) nos. 1 to 3 of the Commercial Code (HGB), in the aggregate, are at least equivalent to one tenth of the share capital, or whichever greater part of the share capital is specified in the by-laws.
(3) Where the statutory reserves and the capital reserves pursuant to section 272 (2) nos. 1 to 3 of the Commercial Code (HGB) do not exceed, in the aggregate, one tenth of the share capital, or whichever greater part of the share capital is specified in the by-laws, they may be used exclusively for purposes of:
1. Offsetting a shortfall for the year insofar as this is not covered by profits carried forward from the preceding year and cannot be offset by reversing other revenue reserves;
2. Offsetting a loss carried forward from the preceding year insofar as this is not covered by any surplus for the year and cannot be offset by reversing other revenue reserves.
(4) Where the statutory reserves and the capital reserves pursuant to section 272 (2) nos. 1 to 3 of the Commercial Code (HGB) exceed, in the aggregate, one tenth of the share capital, or whichever greater part of the share capital is specified in the by-laws, the excess amount may be used for purposes of:
1. Offsetting a shortfall for the year insofar as this is not covered by profits carried forward from the preceding year;
2. Offsetting a loss carried forward from the preceding year insofar as this is not covered by any surplus for the year;
3. A capital increase using company funds pursuant to sections 207 to 220.
The appropriation pursuant to numbers 1 and 2 shall not be permissible if, concurrently, retained income is reversed for purposes of distributing the profits.
Section 150a
(repealed)
Section 151
(repealed)
Section 152
Regulations governing the balance sheet
(1) The share capital is to be recognised on the balance sheet as subscribed capital. In this context, the amount of the share capital allocated to each class of stock is to be stated separately. Contingent capital is to be noted at its nominal amount. Where multiple voting stock exists, the aggregate number of votes of the multiple voting stock and that of the other shares of stock is to be noted for the subscribed capital.
(2) Regarding the item “capital reserves,” the following are to be stated separately on the balance sheet or in the notes:
1. The amount allocated to same in the course of the financial year;
2. The amount withdrawn from same for the financial year.
(3) Regarding the individual items of the retained income, the following are each to be stated separately on the balance sheet or in the notes:
1. The amounts that the general meeting has allocated to same out of the net income for the preceding year;
2. The amounts allocated to same out of the surplus for the financial year;
3. The amounts withdrawn from same for the financial year.
(4) Subsections (1) to (3) shall have no application to stock corporations that are micro share capital companies in the sense of section 267a of the Commercial Code (HGB) where they avail themselves of the eased requirements pursuant to section 266 subsection (1), fourth sentence, of the Commercial Code (HGB). Small stock corporations in the sense of section 267 (1) of the Commercial Code (HGB) are to apply subsections (2) and (3) subject to the proviso that the information is to be stated on the balance sheet.
Sections 153 to 157
(repealed)
Section 158
Regulations governing the income statement
(1) The following items are to be additionally reported in the income statement following the item “surplus for the year/shortfall for the year,” with the numbering being continued:
1. Profits carried forward/loss carried forward from the preceding year
2. Withdrawals from the capital reserves
3. Withdrawals from retained income
a) From the statutory reserves
b) From the reserves for the ownership interest held in a controlling enterprise or in an enterprise holding a majority of the ownership interest
c) From the reserves set out in the by-laws
d) From other revenue reserves
4. Allocations to retained income
a) To the statutory reserves
b) To the reserves for the ownership interest held in a controlling enterprise or in an enterprise holding a majority of the ownership interest
c) To the reserves set out in the by-laws
d) To other revenue reserves
5. Net income/net loss.
The information set out in the first sentence may also be provided in the notes.
(2) Any compensation amount that is to be paid to external shareholders pursuant to a profit and loss absorption agreement, or an agreement on the partial absorption of profit and loss, shall be reported separately from the revenue obtained under such an agreement; where this compensation amount is in excess of the revenue, the excess amount is to be recognised on the balance sheet among the expenses for losses absorbed. No other amounts may be deducted.
(3) Subsections (1) and (2) shall have no application to stock corporations that are micro share capital companies in the sense of section 267a of the Commercial Code (HGB) where they avail themselves of the eased requirements pursuant to section 275 subsection (5) of the Commercial Code (HGB).
Section 159
(repealed)
Section 160
Regulations governing the notes
(1) All notes are to include information on
1. The inventory of shares of stock, and the receipt of additional shares of stock that a stockholder has acquired for the account of the company or of a controlled enterprise or of an enterprise in which the company holds a majority ownership interest, or that a controlled enterprise or enterprise in which the company holds a majority ownership interest has acquired as a founder or subscriber or by way of exercising a right of exchange, or pre-emptive right for newly issued shares of stock, conferred in the context of a conditional capital increase; where such shares of stock were realised in the financial year, the realisation is to likewise be reported, citing the proceeds and the appropriation of the proceeds;
2. The inventory of treasury shares of stock in the company that the company or a controlled enterprise or an enterprise in which the company holds a majority ownership interest or any other party has purchased or accepted in pledge for the account of the company or of a controlled enterprise or an enterprise in which the company holds a majority ownership interest; in this context, the number of these shares of stock and the amount of the share capital allocated to same are to be stated as well as the portion of the share capital they represent, in the case of purchased shares of stock, the point in time at which they were so purchased and the reasons for such purchase are likewise to be stated. Where such shares of stock were purchased or disposed of in the financial year, then such purchase or disposal is to be reported, citing the number of such shares of stock, the amount of the share capital allocated to same, the portion of the share capital they represent, the purchase price or sales price, as well the appropriation of the proceeds;
3. The number of the shares of each class of stock, in which context the nominal amount is to be cited for par-value shares and the computational value is to be cited for each no-par value share individually, unless this information is apparent from the balance sheet; of these, any shares of stock subscribed in the context of a conditional capital increase or of a follow-on offering of authorised capital in the course of the financial year are to be separately stated in each case;
4. The authorised capital;
5. The number of the pre-emptive rights for newly issued shares of stock pursuant to section 192 (2) no. 3;
6. (Repealed)
7. The existence of any cross-shareholding, citing the enterprise;
8. The existence of an ownership interest of which notice has been given pursuant to section 20 subsection (1) or (4) of the present Act or pursuant to section 33 subsection (1) or (2) of the Securities Trading Act (WpHG); in this context, the content of the notification published pursuant to section 20 (6) of the present Act or pursuant to section 40 (1) of the Securities Trading Act is to be stated.
(2) No report shall be provided inasmuch as this is required for the well-being of the Federal Republic of Germany or of one of its Länder.
(3) Subsection (1) nos. 1 and 3 to 8 shall have no application to stock corporations that are small share capital companies in the sense of section 267 (1) of the Commercial Code (HGB). Subsection (1) no. 2 is to be applied to these stock corporations subject to the proviso that the corporation need provide information solely regarding treasury shares of stock that it has itself acquired and that it holds itself, or that have been so acquired and are being held by another person for the corporation’s account; the company need not report the appropriation of the proceeds from the sale of treasury shares of stock.
Section 161
Declaration pursuant to the Corporate Governance Code
(1) The management board and the supervisory board of a company listed on the stock exchange shall declare annually that the recommendations of the Government Commission on the German Corporate Governance Code published by the Federal Ministry of Justice and Consumer Protection (BMJV) in the official section of the Federal Gazette (Bundesanzeiger) have been and are being complied with, or which of the Code’s recommendations have not been applied or are not being applied and the reasons therefor. The same shall apply to the management board and the supervisory board of a company which has exclusively issued other securities than shares of stock for trading on an organised market in the sense of section 2 (11) of the Securities Trading Act (WpHG) and the issued shares of stock of which are traded, on the company’s own initiative, only via a multilateral trading facility in the sense of section 2 (8), first sentence, no. 8 of the Securities Trading Act.
(2) The declaration shall be permanently made accessible to the public on the company’s website.
Leave a Reply