Liquidation of the company in Germany

Today, in our article, we offer to consider the procedure for the liquidation of a company in Germany.

Based on the experience of our company’s specialists and our colleagues, we can safely say that the liquidation of a company in Germany is a multi-stage process that requires compliance with a number of legal procedures, a sufficient amount of attention and time.

For a better understanding of this topic, the specialists of the Law Company “Prikhodko and Partners” offer you to consider the main types of companies provided for by German law, their differences, a detailed description of the liquidation process, we will separate the sale of the company’s corporate rights and draw conclusions.

Let’s start with the types of companies in accordance with German legislation

In Germany, there are similarities with Ukraine in terms of types of companies, in this country there are also several main types of organizational and legal forms of companies:

1. Gesellschaft mit beschränkter Haftung (GmbH)– Limited liability company.
2. Aktiengesellschaft (AG)– Joint-stock company.
3. Offene Handelsgesellschaft (OHG)– Open trading company.
4. Kommanditgesellschaft (KG)– Limited partnership.
5. Gesellschaft bürgerlichen Rechts (GbR)– Civil society.

To understand how they differ, it is necessary to note the following:

1. GmbH: The main characteristic is the limited liability of participants for the company’s obligations. The minimum authorized capital is EUR 25,000.
2. AG: This form is suitable for large enterprises. The minimum authorized capital is EUR 50,000. Shareholders have limited liability.
3. OHG: Participants have unlimited liability for the company’s obligations, i.e. they are liable with all their property.
4. KG: There are two types of partners: limited partners (limited liability) and general partners (unlimited liability).
5. GbR: Suitable for small businesses or projects. Participants bear joint responsibility.

Now a little more detail on the process of liquidation of the company in Germany

Based on the experience of the specialists of the Prykhodko and Partners Law Firm, the procedure for liquidating a company in Germany can be divided into the following stages, namely:

1. Decision on liquidation:

• A decision on liquidation is made at a general meeting of participants or shareholders. This decision must be recorded in the minutes of the meeting.
• For example, a GmbH requires a majority of members holding at least three-quarters of the capital to vote for liquidation.

2. Appointment of liquidator:

• A liquidator is appointed who will be responsible for the liquidation process. Usually, this is the director of the company or a specially appointed person.
• The liquidator can be both an internal employee and an external consultant.

3. Announcement of liquidation:

• A notice of liquidation must be published in the official gazette (Bundesanzeiger) so that creditors can present their claims.
• This announcement is published at least three times in three months.

4. Fulfillment of obligations:

• The liquidator fulfills all the obligations of the company, including the payment of debts and the collection of receivables.
• For example, the liquidator may conduct an audit to determine all financial liabilities and assets of the company.

5. Distribution of remaining assets:

• After satisfying all creditors’ demands, the remaining assets are distributed among the company’s participants in accordance with their shares.
• This can include cash, property, intellectual property, etc.

6. Exclusion from the trade register:

• After completion of all procedures, the liquidator submits an application to exclude the company from the trade register (Handelsregister).
• For this, it is necessary to submit a report on liquidation and confirmation of the fulfillment of all obligations.

Sale of corporate rights of the enterprise

The sale of corporate rights of an enterprise can also be considered as one of the ways to terminate the ownership of such a company, and even receive profit from it.

This process may involve several steps:

1. Company valuation:

• Financial consultants are engaged to determine the value of the company.
• Financial indicators, assets, market conditions and other factors are taken into account.

2. Search for buyers:

• Brokers or specialized companies may be involved to find potential buyers.
• Negotiations are underway with interested parties.

3. Preparation of documents:

• Necessary legal documents are being prepared, including a sales contract.
• The presence of all necessary permits and licenses is checked.

4. Closing the deal:

• Signing the agreement and transferring ownership of the company to the new owner.
• Payment of the agreed amount is made.

Conclusions

Thus, as we noted earlier, the liquidation of a company in Germany is a complex and lengthy process that requires compliance with all legal procedures and requirements.

The choice of the organizational and legal form of the company affects the method of its liquidation and the liability of the participants.

Therefore, for the successful completion of the process of liquidation or sale of corporate rights, it is necessary to recommend the involvement of specialists of the Law Company “Prikhodko and Partners”, who will ensure the correct execution of all procedures at each stage.