Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Part 8
Dissolution and declaration of the company’s nullity
Chapter 1
Dissolution
Subchapter 1
Reasons for dissolving the company and application for entry in the register
Section 262
Reasons for dissolving the company
(1) The stock corporation shall be dissolved
1. By expiry of the time determined in the by-laws;
2. By resolution adopted by the general meeting; this 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 greater majority ratio of capital and may impose further requirements;
3. By the opening of insolvency proceedings for the assets of the company;
4. Upon the court order becoming final and conclusive by which the opening of insolvency proceedings is refused for insufficiency of assets;
5. Upon the direction issued by the court of registration becoming final and conclusive by which a deficiency of the by-laws has been established pursuant to section 399 of the Act on Proceedings in Family Matters and in Matters of Non-contentious Jurisdiction (FamFG);
6. By cancellation of the company for lack of assets pursuant to section 394 of the Act on Proceedings in Family Matters and in Matters of Non-contentious Jurisdiction (FamFG).
(2) This chapter shall apply also if the stock corporation is dissolved on other grounds.
Section 263
Application for entry in the register, and entry in same, of the dissolution
The management board is to file an application for entry of the dissolution of the company in the Commercial Register. This shall not apply in the cases in which insolvency proceedings are opened or the opening of insolvency proceedings is refused (section 262 (1) nos. 3 and 4), as well as in the case of the court establishing a deficiency of the by-laws (section 262 (1) no. 5). In these cases, the court is to enter in the register ex officio the dissolution and the reason therefor. In the case of the cancellation of the company (section 262 (1) no. 6) the entry of the dissolution may be dispensed with.
Subchapter 2
Winding up
Section 264
Need to wind up
(1) After the company has been dissolved, it shall be wound up unless insolvency proceedings have been opened for the assets of the company.
(2) Where the company has been dissolved by cancellation for lack of assets, it shall be wound up only if it becomes apparent after the cancellation that assets exist that are subject to distribution. Upon a corresponding petition having been filed by a party involved, the court is to appoint the liquidators.
(3) Unless otherwise provided for by the present subchapter or unless something else results from the purpose pursued in winding up the company, the regulations shall continue to be applied to the company, until the completion of the winding-up, that apply to companies that are not dissolved.
Section 265
Liquidators
(1) The members of the management board shall wind up the company as liquidators.
(2) The by-laws or a resolution adopted by the general meeting may appoint other persons as liquidators. Section 76 (3), second and third sentence, shall apply mutatis mutandis to the selection of the liquidators. A legal entity may also be a liquidator.
(3) Upon a corresponding petition having been filed by the supervisory board or a minority of stockholders whose shares of stock, in the aggregate, are at least equivalent to one twentieth of the share capital, or to a stake of 500 000 euros, and where grave cause is given, the court is to appoint the liquidators and remove them from office. The stockholders are to demonstrate to the satisfaction of the court that they have been holders of the shares of stock for a minimum of three (3) months. A statutory declaration in lieu of an oath made to a court or a notary shall suffice as satisfactory demonstration. A complaint may permissibly be lodged against the decision taken.
(4) The court-appointed liquidators are entitled to reimbursement for their reasonable cash expenditures and to remuneration for their activities. Should the court-appointed liquidator and the company not come to an agreement, 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).
(5) The general meeting may at any point in time remove liquidators from office who have not been appointed by the court. The general regulations shall apply to claims arising from the employment agreement.
(6) Subsections (2) to (5) do not apply to the member of the board responsible for human resources and social welfare matters (Arbeitsdirektor) insofar as his appointment and removal from office are governed by the regulations of the Act on Employee Co-Determination in the Iron- and Steel-Producing Industry (MontanMitbestG).
Section 266
Application for entry in the register of liquidators
(1) The management board is to file an application for entry in the Commercial Register of the first liquidators as well as their power of representation, while the liquidators are to file such application for any change of liquidators and any modification of their power of representation.
(2) The records and documents as to the appointment or removal from office are to be attached, as the original or as publicly certified copies, to the application for entry in the register, as are the records and documents concerning the power of representation.
(3) In the application for entry in the register, the liquidators are to give an assurance that no circumstances exist that would disqualify them from being appointed pursuant to section 265 (2), second sentence, and that they have been instructed concerning their unrestricted obligation to provide information to the court. Section 37 (2), second sentence, shall apply.
(4) The appointment or removal from office of liquidators by the court shall be entered in the register ex officio.
(5) (repealed)
Section 267
Notice to the company’s creditors
The liquidators are to call on the creditors of the company, indicating that the company is being dissolved, to file their claims for entry in the schedule of creditors’ claims. Notice of the call is to be given in the company’s publications of record.
Section 268
Duties of the liquidators
(1) The liquidators are to terminate the ongoing business, collect receivables, convert the remaining assets to cash, and satisfy the creditors. Insofar as the winding up requires this to be done, they may also enter into new business transactions.
(2) In all other cases the liquidators shall have the rights and duties of the management board within their sphere of business. Like the management board, they are subject to monitoring by the supervisory board.
(3) The prohibition of competition set out in section 88 does not apply to them.
(4) All business letters addressed to a specific recipient must set out the following particulars: the legal structure and the seat of the company, the fact that the company is in the process of being wound up, the court of registration at the seat of the company, and the number under which the company has been entered in the Commercial Register, as well as all liquidators and the chairman of the supervisory board, providing their family names and at least one fully spelled-out first name. Where information is provided regarding the company’s capital, its share capital must be set out in any case, as must be the aggregate amount of the contributions still outstanding if the issue price has not been fully paid for the shares of stock. The particulars pursuant to the first sentence need not be provided in the case of notifications or reports issued in the context of an existing business relationship and for which pre-printed forms are customarily used that simply are to be completed by the particulars respectively required for the individual case. Order forms shall be deemed to be business letters in the sense of the first sentence; the third sentence shall not be applicable to them.
Section 269
Representation by the liquidators
(1) The liquidators shall represent the company in court and outside of court.
(2) Where several liquidators have been appointed, then, unless the by-laws or the authority otherwise competent have determined otherwise, any and all liquidators shall have authority to represent the company solely jointly. Where a declaration of intent is to be made to the company, it shall suffice for it to be made to one (1) liquidator.
(3) The by-laws or the authority otherwise competent may also determine that individual liquidators shall have authority to represent the company alone or jointly with an officer of the company vested with full commercial power of attorney (Prokurist). The same may be determined by the supervisory board, provided it is has been granted the corresponding authority in the by-laws or by a resolution adopted by the general meeting. Subsection (2), second sentence, shall apply mutatis mutandis to these cases.
(4) Liquidators having the authority to represent the company jointly may grant authority to individual liquidators from among their midst to enter into certain business transactions or certain types of business transactions. This shall apply mutatis mutandis where an individual liquidator has authority to represent the company jointly with an officer of the company vested with full commercial power of attorney (Prokurist).
(5) The power of representation of the liquidators may not be restricted.
(6) Liquidators shall sign for the company by setting an addendum to the business name indicating the fact that the company is being wound up, and with their signature.
Section 270
Opening balance sheet. Annual accounts and management report
(1) The liquidators are to prepare, for the commencement of the process of winding up the company, a balance sheet (opening balance sheet) and a report explaining the opening balance sheet and, as per the end of each year, annual accounts and a management report.
(2) The general meeting shall resolve on the approval of the opening balance sheet and of the annual accounts as well as on the approval of the actions taken by the liquidators and the members of the supervisory board and the discharge granted to same. The regulations governing the annual accounts shall be correspondingly applied to the opening balance sheet and the explanatory report. However, items of property making up the fixed assets are to be valued as if they were current assets insofar as it is intended to dispose of them within a foreseeable period of time, or insofar as these assets no longer serve the company’s business operations; this shall also apply to the annual accounts.
(3) The court may grant a release from the obligation to have the annual accounts and the management report audited by an auditor of annual accounts if the circumstances of the company are so easily surveyed that, in the interests of the creditors and stockholders, an audit seems not to be required. A complaint may permissibly be lodged against the decision taken.
Section 271
Distribution of the assets
(1) The assets of the company that remain following the discharge of the liabilities shall be distributed among the stockholders.
(2) The assets are to be distributed in accordance with the shares held in the share capital unless shares of stock exist that grant different rights in the distribution of the company’s assets.
(3) Where the contributions towards the share capital have not been made for all shares of stock in the same ratio, the contributions made shall be reimbursed and any surplus shall be distributed in accordance with the shares held in the share capital. Where the assets do not suffice to reimburse the contributions, the stockholders are to bear the loss in accordance with their shares in the share capital; insofar as this is necessary, the contributions as yet outstanding are to be collected.
Section 272
Protection of creditors
(1) The assets may only be distributed if one (1) year has lapsed since the date on which the notice to the creditors has been published.
(2) Where a creditor who is known fails to come forward, the amount owed is to be deposited on his behalf where a right to deposit exists.
(3) Where a liability cannot be settled for the time being, or where it is in dispute, the assets may only be distributed if security has been provided to the creditor.
Section 273
Completion of the winding up
(1) Where the winding up has been terminated and the final accounts have been rendered, the liquidators are to file an application for entry of the completion of the winding up in the Commercial Register. The company is to be cancelled.
(2) The books and records of the company are to be deposited at a secure site determined by the court and are to be kept safe for ten (10) years.
(3) The court may allow the stockholders and the creditors to inspect the books and records.
(4) Should it become apparent subsequently that further measures serving to wind up the company are necessary, the court is to re-appoint the liquidators involved thus far, or is to appoint other liquidators, upon a corresponding petition having been filed by a party involved. Section 265 (4) shall apply.
(5) A complaint may permissibly be lodged against the decisions set out in subsections (2), (3), and (4), first sentence.
Section 274
Continuation of a dissolved company
(1) Where a stock corporation has been dissolved by lapse of time or by a resolution adopted by the general meeting, then for as long as the distribution of the assets among the stockholders has not commenced, the general meeting may resolve to continue the company. 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 greater majority ratio of capital and may impose further requirements.
(2) The same shall apply where the company:
1. Has been dissolved as a result of insolvency proceedings having been opened, but the proceedings have been discontinued in accordance with the petition filed by the creditor, or have been terminated following the approval of an insolvency plan providing for the continued existence of the company;
2. Has been dissolved as a result of the court establishing a deficiency of the by-laws pursuant to section 262 (1) no. 5, but an amendment of the by-laws remedying such deficiency is resolved upon at the latest concurrently with the resolution adopted to continue the company.
(3) The liquidators are to file an application for entry of the continuation of the company in the Commercial Register. In filing such application for entry in the register, they are to submit proof that the distribution of the company’s assets among the stockholders has not yet commenced.
(4) The resolution adopted as to continuing the company shall enter into force only once it has been entered in the Commercial Register kept at the seat of the company. In the case governed by subsection (2) no. 2, the resolution as to the continuation of the company shall have no effect for as long as neither it nor the resolution adopted as to the amendment of the by-laws has been entered in the Commercial Register kept at the seat of the company; both resolutions should be entered in the Commercial Register only jointly.
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