Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Subchapter 5
Convertible bonds. Income bonds
Section 221
(1) Bonds entailing a right of exchange or pre-emptive right for newly issued shares of stock that is conferred on creditors or on the company (convertible bonds), and bonds entailing a connection of the rights of creditors with the stockholders’ participation in the profits (income bonds) may only be issued based on a resolution adopted by the general meeting. The resolution shall require a majority of at least three quarters of the share capital represented at the time such resolution is adopted. The by-laws may stipulate a different majority ratio of capital and may impose further requirements. Section 182 (2) shall apply.
(2) An authorisation of the management board to issue convertible bonds may be granted for a maximum period of five (5) years. The management board and the chairman of the supervisory board are to deposit the resolution adopted as to the issuance of the convertible bonds as well as a declaration regarding their issuance with the Commercial Register. Notice of the resolution and the declaration is to be given in the company’s publications of record.
(3) Subsection (1) shall apply mutatis mutandis where participatory rights are conferred.
(4) The stockholders have a pre-emptive right to convertible bonds, income bonds, and participatory rights. Sections 186 and 193 (2) no. 4 shall apply mutatis mutandis.
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