Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Book 3
Affiliated enterprises
Part 1
Inter-company agreements
Chapter 1
Types of inter-company agreements
Section 291
Control agreement. Profit and loss absorption agreement
(1) Inter-company agreements are contracts by which a stock corporation or public partly limited partnership allows the management of its company to be performed by some other enterprise (control agreement) or by which it enters into obligation to transfer its entire profits to some other enterprise (profit and loss absorption agreement). Likewise, a contract by which a stock corporation or a public partly limited partnership accepts to manage its enterprise for the account of some other enterprise shall be deemed to be an agreement regarding the transfer of the entire profits.
(2) Where enterprises that are not controlled by one another agree by a contract to place themselves under common management, without this resulting in one of these enterprises being controlled by some other enterprise concluding the contract, then this contract is not a control agreement.
(3) Performance by the company where a control agreement or a profit and loss absorption agreement exists shall not be deemed a violation of sections 57, 58, and 60.
Section 292
Other inter-company agreements
(1) Inter-company agreements furthermore are contracts by which a stock corporation or public partly limited partnership:
1. Enters into obligation to combine its profits, or the profits of individual of its operations, as a whole or in part with the profits of other enterprises, or with the profits of individual operations of other enterprises, for distribution of the pooled profits (profit pool),
2. Enters into obligation to transfer part of its profits or the profits of individual of its operations, as a whole or in part, to some other party (agreement as to the partial absorption of profit and loss),
3. Leases the operation of its enterprise to some other party or surrenders it in some other manner (company lease agreement, company surrender agreement).
(2) A profit-sharing contract with members of the management board and of the supervisory board or with individual employees of the company, as well as a profit-sharing arrangement in the context of contracts concluded as part of the ongoing pursuit of business or of license agreements, is not an agreement as to the partial absorption of profit and loss.
(3) A company lease agreement or company surrender agreement and the resolution by which the general meeting has consented to it shall not be null and void by reason of the agreement violating sections 57, 58, and 60. The first sentence does not preclude an action for avoidance of the resolution being brought for such violation.
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