Last Updated on May 29, 2021 by LawEuro
Stock Corporation Act (Laws / Regulations of Germany)
Chapter 3
Securitisation of the company and the creditors
Section 300
Statutory reserves
The following are to be allocated to the statutory reserves instead of the amount specified in section 150 (2):
1. If a profit and loss absorption agreement exists: that amount of the surplus for the year, arising without the transfer of the profits and reduced by any loss carried forward from the preceding year, that is necessary in order to uniformly replenish the statutory reserves, while adding capital reserves within the first five (5) financial years commencing during the existence of the agreement or after the implementation of a capital increase, such that they are at least equivalent to one tenth of the share capital or whichever greater part of the share capital is specified in the by-laws, at a minimum, however, the amount specified in no. 2;
2. If an agreement as to the partial absorption of profit and loss exists: that amount of the surplus for the year, arising without the transfer of the profits and reduced by any loss carried forward from the preceding year, that would have to be allocated to the statutory reserves pursuant to section 150 (2);
3. If a control agreement exists, without the company also being obligated to transfer its entire profits: that amount that is required to replenish the statutory reserves pursuant to no. 1, at a minimum, however, the amount specified in section 150 (2) or, if the company is obligated to transfer parts of its profits, the amount specified in no. 2.
Section 301
Maximum amount of the profit transfer
Irrespective of the agreements made regarding the calculation of the profits to be transferred, a company may remit as its profits, at a maximum, the surplus for the year accruing without the profits being remitted, reduced by a loss carried forward from the preceding year, by the amount to be allocated to the statutory reserves pursuant to section 300, and by the amount barred from distribution pursuant to section 268 (8) of the Commercial Code (HGB). Where, during the term of the agreement, amounts have been allocated to other revenue reserves, these amounts may be withdrawn from the other revenue reserves and remitted as profits.
Section 302
Absorption of losses
(1) Where a control agreement or a profit and loss absorption agreement exists, the other contracting party is to absorb any shortfall for the year that would otherwise accrue during the term of the agreement, unless the shortfall is offset by amounts withdrawn from the other revenue reserves that have been allocated to same during the agreement’s term.
(2) Where a controlled company has leased the operation of its enterprise to the controlling enterprise or has otherwise surrendered it, the controlling enterprise is to absorb any shortfall for the year that would otherwise accrue during the term of the agreement insofar as the agreed counter-performance is not at least equivalent to the appropriate remuneration.
(3) The company may waive its claim to compensation, or conclude a compromise regarding this claim, only after three (3) years have lapsed after the day on which the entry of the agreement’s termination in the Commercial Register pursuant to section 10 of the Commercial Code (HGB) has been published by notice. This shall not apply if the party obligated to provide compensation is unable to pay his debts as they become due and concludes a compromise with his creditors in order to avert insolvency proceedings or if the obligation to provide compensation is provided for by an insolvency plan. The waiver or compromise shall enter into force only if the external stockholders grant their consent by a separate resolution and no minority, the aggregate of whose shares is at least equivalent to one tenth of the share capital represented at the time such resolution is adopted, raises an objection and has it recorded in the minutes.
(4) The claims under the present regulations shall become statute-barred ten (10) years following the day on which the entry of the agreement’s termination in the Commercial Register pursuant to section 10 of the Commercial Code (HGB) has been published by notice.
Section 303
Protection of creditors
(1) Where a control agreement or a profit and loss absorption agreement ends, the other contracting party is to provide security to those of the creditors of the company whose claims have arisen prior to publication by notice of the agreement’s termination having been entered in the Commercial Register pursuant to section 10 of the Commercial Code (HGB), provided they come forward to him for this purpose within six (6) months of the publication by notice of the respective entry. This right is to be indicated to the creditors in the publication by notice of the respective entry.
(2) Those creditors shall not be entitled to demand security who are entitled to preferred satisfaction of their claims, in the event of insolvency, out of covering funds that were created for their protection pursuant to the stipulations of the law and that are monitored by the state.
(3) Instead of providing security, the other contracting party may guarantee the claim. Section 349 of the Commercial Code (HGB) regarding the exclusion of the defence of failure to pursue remedies shall have no application.
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