Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Chapter 2
Conclusion, amendment, and termination of inter-company agreements
Section 293
Consent of the general meeting
(1) An inter-company agreement shall enter into force only with the consent of 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 greater majority ratio of capital and may impose further requirements. The provisions of the law and those of the by-laws governing amendments of the by-laws are not to be applied.
(2) A control agreement or a profit and loss absorption agreement shall enter into force, in cases in which the other contracting party is a stock corporation or public partly limited partnership, only if the general meeting of that company likewise grants its consent. Subsection (1), second to fourth sentences, shall apply mutatis mutandis to the resolution.
(3) The agreement must be made in writing.
(4) (repealed)
Section 293a
Report on the inter-company agreement
(1) The management board of each stock corporation or public partly limited partnership that is party to an inter-company agreement is to submit a detailed report in writing, insofar as the consent of the general meeting pursuant to section 293 is required, explaining and justifying in legal and economic terms the conclusion of the inter-company agreement, the details of the agreement, and in particular the nature and amount of the compensation pursuant to section 304 and the settlement payment pursuant to section 305; the management boards may also submit a common report. The report is to indicate any particular difficulties encountered in valuing the contracting enterprises as well as the consequences the agreement will have for the ownership interest held by the stockholders.
(2) The report need not address facts that, if they were to become known, are suited to cause a greater than insignificant disadvantage to one of the contracting enterprises or to an affiliated enterprise. In such event, the reasons are to be set out for which the facts were not addressed in the report.
(3) The report shall not be required if all owners of shares in all legal entities involved waive its being submitted and this waiver is publicly certified.
Section 293b
Audit of the inter-company agreement
(1) Unless all shares of stock in the controlled company are held by the controlling enterprise, the inter-company agreement is to be audited for each contracting stock corporation or public partly limited partnership by one or several expert auditors (contract auditors).
(2) Section 293a (3) shall be correspondingly applied.
Section 293c
Appointment of the contract auditors
(1) The contract auditors shall be selected and appointed by the court, in each case upon the management boards of the contracting companies having filed a corresponding petition. They may be jointly appointed upon the management boards filing a common petition for all contracting companies. That regional court (Landgericht) shall have jurisdiction in the judicial district of which the controlled company has its seat. Where a division for commercial matters has been formed at the regional court, the chairman of said division shall take the decision instead of the civil division. Section 318 (5) of the Commercial Code (HGB) shall apply to the reimbursement of the auditors appointed by the court and their remuneration.
(2) Section 10 subsections (3) to (5) of the Transformation Act (UmwG) shall apply mutatis mutandis.
Section 293d
Selection, position, as well as liability and responsibilities of the contract auditors
(1) Section 319 subsections (1) to (4), section 319a (1), section 319b (1), section 320 (1), second sentence, and subsection (2), first and second sentences, of the Commercial Code (HGB) shall apply mutatis mutandis to the selection of the contract auditors and their right to request information. The right to request information shall exist vis-à-vis the contracting enterprises and vis-à-vis a group member company as well as vis-à-vis a controlled and a controlling enterprise.
(2) Section 323 of the Commercial Code (HGB) shall apply mutatis mutandis to the liability and responsibilities of the contract auditors, their agents, and the legal representatives of an auditing firm cooperating with and assisting in the audit. The liability and responsibilities shall be given vis-à-vis the contracting enterprises and their shareholders.
Section 293e
Audit report
(1) The contract auditors are to report in writing on the results of their audit. The audit report is to be concluded by a declaration as to whether or not the compensation proposed or the settlement payment proposed is a fair equivalent. In this context, the following information is to be provided:
1. The methods based on which the compensation and settlement payment have been established;
2. The reasons for which the application of these methods is appropriate;
3. In the event that several methods have been applied: which compensation or which settlement payment would result in each instance of different methods being applied; concurrently, the report is to present how the various methods have been weighted in determining the compensation proposed or the settlement payment proposed and the values on which they are based, as well as any particular difficulties encountered in valuing the contracting enterprises.
(2) Section 293a subsections (2) and (3) shall be correspondingly applied.
Section 293f
Preparations for the general meeting
(1) From the time onwards at which the general meeting is convened that is to adopt a resolution consenting to the inter-company agreement, the following documents are to be kept available for inspection by the stockholders at the business premises of each of the stock corporations or public partly limited partnerships that are involved:
1. The inter-company agreement;
2. The annual accounts and the management reports of the contracting enterprises for the last three (3) financial years;
3. The reports submitted by the management boards pursuant to section 293a and the reports submitted by the contract auditors pursuant to section 293e.
(2) Upon a corresponding demand being made, copies of the documents designated in subsection (1) are to be provided to each stockholder without undue delay and at no charge.
(3) The duties pursuant to subsections (1) and (3) shall not be applicable if the documents designated in subsection (1) are kept accessible, for the same period of time, on the company website.
Section 293g
Conduct of the general meeting
(1) The documents designated in section 293f (1) are to be made available at the general meeting.
(2) At the outset of the meeting, the management board is to give an oral presentation of the inter-company agreement. The presentation is to be attached to the minutes as an annex.
(3) Should any stockholder so request at the general meeting, he is to be provided also with information about any and all matters of the other contracting party that are relevant to the conclusion of the agreement.
Section 294
Entry in the register. Entry into force
(1) The management board of the company is to file an application for entry in the Commercial Register of the existence and the nature of the inter-company agreement as well as the name of the other contracting party; should a plurality of agreements as to the partial absorption of profit and loss exist, some other designation may be entered in the register instead of the name of the other contracting party, provided it sets out in exact terms the respective agreement as to the partial absorption of profit and loss. The agreement as well as – where the agreement will enter into force only with the consent of the general meeting of the other contracting party – the minutes recording such resolution and their annexes are to be attached to the application for entry in the register in the original version, as an execution, or as a public certified copy.
(2) The agreement shall enter into force only once its existence has been entered in the Commercial Register kept at the seat of the company.
Section 295
Amendment
(1) An inter-company agreement may be amended only with the consent of the general meeting. Sections 293 to 294 shall apply mutatis mutandis.
(2) In order for the consent of the general meeting of the company to enter into force by which the stipulations of the agreement are amended that create an obligation to provide compensation to the external stockholders of the company or to purchase their shares of stock, a separate resolution must be adopted by the external stockholders. Section 293 (1), second and third sentences, shall apply to the separate resolution. Should any external stockholder so request at the general meeting adopting a resolution as to the consent, he is to be provided also with information about any and all matters of the other contracting party that are relevant to the amendment.
Section 296
Rescission
(1) An inter-company agreement may be rescinded only as per the end of the financial year or of any accounting period otherwise contractually determined. Any retroactive rescission shall be impermissible. The rescission must be made in writing.
(2) An agreement creating an obligation to provide compensation to the external stockholders or to purchase their shares of stock may be rescinded only if the external stockholders consent by adopting a separate resolution. Section 293 (1), second and third sentences, section 295 (2), third sentence, shall apply mutatis mutandis to the separate resolution.
Section 297
Termination
(1) An inter-company agreement may be terminated for grave cause without complying with a notice period. Grave cause shall be given in particular if the respective other contracting party foreseeably will not be in a position to fulfil the duties incumbent on it as a result of the agreement.
(2) The management board of the company may terminate an agreement creating an obligation to provide compensation to the external stockholders of the company or to purchase their shares without grave cause being given only in those cases in which the external stockholders consent by adopting a separate resolution. Section 293 (1), second and third sentences, section 295 (2), third sentence, shall apply mutatis mutandis to the separate resolution.
(3) The termination must be made in writing.
Section 298
Application for entry in the register and entry
The management board of the company is to file an application for entry in the Commercial Register of the termination of an inter-company agreement, the reasons therefor, and the time at which it was so terminated, and shall do so without undue delay.
Section 299
Prohibition of instructions
It shall not be possible to instruct the company, based on an inter-company agreement, to amend, uphold, or terminate the agreement.
Leave a Reply