Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Book 2
Public partly limited partnership
Section 278
Nature of the public partly limited partnership
(1) The public partly limited partnership is a company having a legal personality of its own in which at least one shareholder is liable to the creditors of the company without limitation (general partner) and the remaining shareholders, without being personally liable for the obligations of the company, have an ownership interest in the share capital divided up into shares of stock (limited liability shareholders of a public partly limited partnership).
(2) The legal relationship of the general partners inter se and vis-à-vis the entirety of the limited liability shareholders of a public partly limited partnership as well as vis-à-vis third parties, namely the authority of the general partners to manage the affairs of the company and to represent it, is governed by the regulations of the Commercial Code (HGB) relating to the limited partnership.
(3) In all other cases, the regulation of Book 1 relating to the stock corporation shall apply mutatis mutandis to the public partly limited partnership unless anything to the contrary is stipulated in the regulations set out below or results from the lack of a management board.
Section 279
Business name
(1) The business name of the public partly limited partnership must bear the designation “Kommanditgesellschaft auf Aktien” (public partly limited partnership), or a generally understandable abbreviation of this designation, regardless of whether or not the business name continues to be used pursuant to section 22 of the Commercial Code (HGB) or other statutory regulations.
(2) If no natural person within the company is personally liable, the business name must bear a designation identifying the limitation of liability, regardless of whether or not the business name continues to be used pursuant to section 22 of the Commercial Code (HGB) or other statutory regulations.
Section 280
Establishment of the by-laws. Founders
(1) The by-laws must be established by way of being recorded by a notary. The deed is to set out the nominal amount of the shares of stock, in the case of par-value shares, and in the case of no-par-value shares the number, as well as the issue price and, where several classes of stock exist, the class of stock of the shares, that each of the parties holding an ownership interest is acquiring. Authorised representatives may act only if they have a power of attorney certified by a notary.
(2) All general partners must contribute to the establishment of the by-laws. Besides them, those persons must cooperate and assist in their establishment who, as the limited liability shareholders of a public partly limited partnership, are acquiring shares of stock in return for contributions.
(3) The shareholders who have established the by-laws are the founders of the company.
Section 281
Content of the by-laws
(1) Besides the determinations set out in section 23 subsections (3) and (4), the by-laws must set out the family name, first name, and place of residence of each general partner.
(2) The assets contributed by the general partners must be specified in the by-laws by their amount and nature if they are not paid towards the share capital.
(3) (repealed)
Section 282
Entry in the register of the general partners
In entering the company in the Commercial Register, the general partners are to be identified instead of the members of the management board. Furthermore, it is to be entered in the register which kind of power of representation is conferred upon the general partners.
Section 283
General partners
The regulations governing the management board of the stock corporation shall apply mutatis mutandis to the general partners regarding
1. The applications for entry, filings, declarations, and proof submitted to the Commercial Register, as well as regarding publications by notice;
2. The formation audit;
3. The duty to exercise skill and care as well as the liability and responsibilities;
4. The obligations vis-à-vis the supervisory board;
5. The permissibility of granting a loan;
6. Convening the general meeting;
7. The special audit;
8. The assertion of claims to compensation regarding the management of the company’s affairs;
9. The drawing up, submission, and audit of the annual accounts and of the proposal for the appropriation of the net income;
10. The submission and audit of the management report, of a separate non-financial report as well as of consolidated financial statements, a consolidated management report, and a separate consolidated non-financial report;
11. The submission, audit, and disclosure of individual accounts pursuant to section 325 (2a) of the Commercial Code (HGB);
12. The issuance of shares of stock in the case of a conditional capital increase, in the case of authorised capital, and in the case of a capital increase using company funds;
13. The nullity and avoidance of resolutions adopted by the general meeting;
14. The application to open insolvency proceedings.
Section 284
Prohibition of competition
(1) A general partner may not pursue any business in the company’s line of business for his own account or that of others without having obtained the express consent of the remaining general partners and of the supervisory board, nor may a general partner be a member of the management board or a managing director or a general partner of some other, similar trading company. The consent may be granted only for specific types of transactions or for specific trading companies.
(2) Where a general partner violates this prohibition, the company may demand compensation of its damages. It may instead demand of the general partner that he allow the transactions he has entered into for his own account to be considered transactions entered into for the account of the company, and that he surrender the remuneration obtained for the transactions entered into for the account of some other party, or that he assign his claim to the remuneration.
(3) The company’s claims shall become statute-barred following the expiry of three (3) months from the point in time at which the other general partners and the members of the supervisory board become aware of the measure resulting in the obligation to provide compensation for damages, or should become aware of same unless they are grossly negligent. Such claims shall become statute-barred, irrespective of this awareness, or grossly negligent lack of awareness, following the expiry of five (5) years from the date on which they have arisen.
Section 285
General meeting
(1) At the general meeting, the general partners shall have voting rights only for their shares of stock. They may not exercise this voting right, neither for themselves nor on behalf of some other party, where resolutions are adopted on:
1. The election of the supervisory board and the removal of its members from office;
2. The approval of the actions taken by general partners and the members of the supervisory board and discharge granted to same;
3. The appointment of special auditors;
4. The assertion of claims to compensation;
5. The waiver of claims to compensation;
6. The election of the auditors of the annual accounts.
Where these resolutions are adopted, their voting right also may not be exercised by some other party.
(2) The resolutions adopted by the general meeting require the consent of the general partners insofar as they concern matters requiring, in the case of a limited partnership, the agreement of the general partners and the limited partners. Exercising the authority to which the general meeting or a minority of limited liability shareholders of a public partly limited partnership are entitled in appointing auditors and asserting claims of the company arising from its formation or the management of its affairs shall not require the consent of the general partners.
(3) Resolutions adopted by the general meeting requiring the consent of the general partners are to be filed with the Commercial Register only once said consent has been obtained. In the case of resolutions that are to be entered in the Commercial Register, the consent is to be notarially recorded in the minutes of the deliberations or in an annex to said minutes.
Section 286
Annual accounts. Management report
(1) The general meeting shall adopt a resolution as to the approval of the annual accounts. The resolution shall require the consent of the general partners.
(2) In the annual balance sheet, the equity shares of the general partners are to be separately recognised under the item “Subscribed Capital.” The loss allocated to the equity share of a general partner for the financial year is to be written down from the equity share. Inasmuch as the loss is higher than the equity share, it is to be recognised separately on the “Assets” side of the balance sheet under the designation “Call liabilities of general partners” among the receivables insofar as a payment obligation exists; where no such payment obligation exists, the amount is to be designated as “Loss share of general partners not covered by assets contributed” and is to be recognised pursuant to section 268 (3) of the Commercial Code (HGB). Loans governed by section 89 that the company has granted to general partners, their spouses, partners in a civil union or minor children, or to third parties acting for the account of these persons, are to be noted on the “Assets” side under the corresponding items with the designation “of which granted to general partners and their relatives.”
(3) The profit or loss allocated to the equity shares of the general partners need not be separately recognised in the income statement.
(4) Section 285 no. 9 letters a and b of the Commercial Code (HGB) shall apply to general partners subject to the proviso that the profit allocated to the equity share of a general partner need not be stated.
Section 287
Supervisory board
(1) Unless stipulated otherwise in the by-laws, the supervisory board shall implement the resolutions adopted by the limited liability shareholders of a public partly limited partnership.
(2) In legal disputes pursued by the entirety of the limited liability shareholders of a public partly limited partnership against the general partners, or pursued by the latter against the entirety of the limited liability shareholders of a public partly limited partnership, the supervisory board shall represent the limited liability shareholders of a public partly limited partnership unless the general meeting has elected special representatives. The company shall be liable for the costs of the legal dispute that the limited liability shareholders of a public partly limited partnership are to bear, notwithstanding the recourse it may take against the limited liability shareholders of a public partly limited partnership.
(3) General partners cannot be members of the supervisory board.
Section 288
Withdrawals by general partners. Granting of loans
(1) Where a loss is allocated to a general partner and such loss is in excess of his equity share, he may not withdraw any profits allocated to his equity share. Furthermore, he may not withdraw any such participation in the profits and may not withdraw any money from his equity share for as long as the sum total of the net loss, call liabilities, shares in the loss of general partners, and receivables from loans granted to general partners and their relatives is in excess of the sum total of the profits carried forward, the capital reserves, and the retained income, as well as the equity shares of the general partners.
(2) As long as the pre-requisite set out in subsection (1), second sentence, is given, the company may not grant any loan governed by section 286 (2), fourth sentence. Any loan granted notwithstanding is to be repaid immediately, irrespective of any agreements to the contrary.
(3) Claims of general partners to remuneration for their activities, such remuneration not being dependent on the profits, shall not be affected by the present regulations. Section 87 (2), first and second sentences, shall apply mutatis mutandis for an abatement of such remunerations.
Section 289
Dissolution
(1) Unless otherwise determined in subsections (2) to (6), the grounds for which the public partly limited partnership is dissolved or for which one of several general partners leaves the company shall be governed by the regulations of the Commercial Code (HGB) regarding the limited partnership.
(2) The public partly limited partnership shall also be dissolved:
1. Upon the court order becoming final and conclusive by which the opening of insolvency proceedings is refused for insufficiency of assets;
2. 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);
3. 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).
(3) The company is not dissolved by the opening of insolvency proceedings for the assets of a limited liability shareholder of a public partly limited partnership. The creditors of a limited liability shareholder of a public partly limited partnership are not entitled to terminate the company.
(4) In order for the limited liability shareholders of a public partly limited partnership to terminate the company and for them to grant their consent to the company being dissolved, a resolution adopted by the general meeting is required. The same shall apply to a petition filed for dissolution of the company by a decision by the court. 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.
(5) General partners may leave the company, besides being expelled, only if the by-laws declare this to be permissible.
(6) All general partners are to file an application for entry in the Commercial Register if the company is dissolved or if a general partner leaves the company. Section 143 (3) of the Commercial Code (HGB) shall apply mutatis mutandis. In the cases governed by subsection (2), the court is to enter the dissolution in the register ex officio and the reason therefor. In the case governed by subsection (2) no. 3, the entry of the dissolution may be dispensed with.
Section 290
Winding up
(1) Unless stipulated otherwise in the by-laws, all general partners and one or several persons elected by the general meeting as liquidators shall wind up the company.
(2) Any general partners may also file a petition for the appointment of liquidators or their removal from office by the court.
(3) Where the company has been dissolved by way of cancellation for lack of assets, it shall be wound up only if it should become apparent following its cancellation that assets exist that are subject to distribution. The liquidators are to be appointed by the court upon a petition having been filed by a party involved.
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