Corporate Law and M&A

The days where an entrepreneur such as Krupp was able to manage a business with tens of thousands of employees in the legal form of sole proprietorship are long gone. The decision on whether to undertake entrepreneurial activity in a personalised or capital-based corporate structure is a contemporary feature, but should be strategically addressed and thoroughly conceived with the help of lawyers.

In this regard, the relationship between the partners/shareholders is of crucial importance. Corporate law offers a broad variety of legal forms, for example, a partnership organised under the Civil Code (GbR), general partnership (OHG), private limited liability company (GmbH), or a joint stock company (AG), and the possibilities for structuring the business are manifold.

The same is true of a merger, hiving-off of business segments and/or disposal of business operations: For an analysis of the company, a business and strategic approach and review of any legal pitfalls, clients need a skilled M&A team that is able to support such an immensely important transaction.

Careful drafting of contracts for the establishment and restructuring of companies is instrumental in avoiding conflicts between shareholders and allowing for optimal financing of the company. The same is true for the avoidance of liability risks.

Consulting services of our lawyers in the field of corporate law and M&A

Derra, Meyer & Partners can provide you with drafting of  and support you in the negotiating of articles of associations along with memorandums, agreements between a corporation and its director or management board and any other corporate law related arrangements. If disputes with shareholders or directors arise nonetheless, then we are able to assist you in enforcing your rights both in and out of court. This also applies to situations where the client's liability as a shareholder, member of the management board or supervisory board member or as a company director is at issue.

Ranging from a due diligence and negotiations between the investor and the business owner, to the drafting of any corporate purchase and sale contracts or similar transactions (mergers, divisions), clients require competent support in M&A-related matters. This includes legal advice in the early stages, when you will have typically signed a Letter of Intent (LoI) or a non-disclosure agreement (NDA) to conclude on the negotiations, or if you are faced with the question of how you want to structure a transaction. Taking into account tax law issues, a decision will be made whether such a corporate transaction is to take the form of a share deal, asset deal or any other form. This will be done also taking into account labour law-related issues that are equally relevant.

Depending on the size and volume of the transaction and with a view to any special issues that may exist, a team will work out a concept that allows to control the process on a national and international level.

Multidisciplinary consulting services in the field of corporate law and M & A  

At Derra, Meyer & Partner Rechtsanwälte PartGmbB, we have specialists in all fields of expertise concerned. Among our approximately 40 lawyers, there are several certified specialist lawyers in commercial and corporate law, who have many years of experience in corporate law and M&A transactions. If and to the extent that special problems must be addressed, the team may also include certified tax law specialists, certified labour law or certified insolvency law specialists. In respect of any liability claims, we can also consult with colleagues who, as compliance officers and/or certified specialists in criminal law, are closely familiar with special liability standards.

Since the 1980s, we offer consulting and legal representation services in national as well as international transactions in the field of M&A. While international cases in the early years concerned primarily European transactions, recent years have seen an increase in transactions with Chinese, Hong Kong Chinese, Thai or US-American participation. Through our offices in Italy and Poland as well as the DIRO network, we are able to offer competent, hassle-free assistance also beyond the German borders.

 

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Current Issues

09 Okt
2017

Transparency register

A transparency register was created with the purpose of recording the beneficial owners of legal persons and partnerships, as well as of trusts.

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The 4th European Money Laundering Directive (EU) 2015/849 was implemented in Germany on June 24th, 2017 amending the German Money Laundering Act (MLA). A transparency register was created with the purpose of recording the beneficial owners of legal persons and partnerships, as well as of trusts.

Legal persons of German private law (e.g. AG, GmbH, UG, e.V.) and registered partnerships (e.g. OHG, KG, PartG) are now obliged to collect information about their beneficial owners and to inform the register about them without delay (§ 20 para. 1 sentence 1 MLA). According to § 21 MLA the same obligations also apply to the trustees of trusts and of foundations without legal capacity or similar legal formations domiciled in Germany. The obligations to collect data and to notify the transparency register are accompanied by the obligation of the beneficial owner to provide the necessary information to the concerned companies.

A beneficial owner is any natural person holding directly or indirectly more than 25% of the share capital or controlling more than 25% of the voting rights or controlling the company in a comparable manner (§ 3 MLA). Such indirect control is in particular the case when the shares are held by another company which is controlled by a natural person. This also includes shares nominally held by a trustee for the beneficial owner. Relevant is the natural person standing at the end of a chain of participations.

Under § 19 para. 1 MLA the transparency register shall receive the following information about the beneficial owner: first and last name, possibly nationality, date of birth, place of residence as well as the nature and scope of the economic interest. The information about the nature and scope of the economic interest shall illustrate what makes the person a beneficial owner. This includes, in particular, the size of the shares or of the voting rights, but also a possible function of the beneficial owner as a legal representative, managing director, shareholder or similar functions, which allow the owner to control the company in other ways.

If the relevant information is already published in electronically retrievable documents and records in German public registers then the companies is exempt from this obligation to provide information about the beneficial owner again. That concerns registrations in the commercial register or partnership register or associations register. I.e. companies which shareholders are natural persons do not have to provide information to the transparency register.

However, if the shareholder is another legal person or a trust, the company is affected by the reporting requirement. This applies, in particular, if the shareholder is a foreign legal person because information about its ownership structure is generally not available in German registers.

Violations of the reporting obligations could be sanctioned with a regulatory fine up to EUR 100,000.00.

In case of doubts about the fulfillment of reporting obligations by the published information in other German registers the company should report the necessary data to the transparency register. The company also has to notify about any subsequent changes of the beneficial owners without a special request of the register. It is advisable to install a monitoring system for continuous updating.

The transparency register is run by Bundesanzeiger Verlag under the following link: https://www.transparenzregister.de.

Please do not hesitate to contact our lawyers if you have any questions regarding the reporting requirements and rights of access to the data of the transparency register.

Rechtsanwalt Alexander Shmagin

dmp@derra-b.de

10/2017

The 4th European Money Laundering Directive (EU) 2015/849 was implemented in Germany on June 24th, 2017 amending the German Money Laundering Act (MLA). A transparency register was created with the purpose of recording the beneficial owners of legal persons and partnerships, as well as of trusts.

Legal persons of German private law (e.g. AG, GmbH, UG, e.V.) and registered partnerships (e.g. OHG, KG, PartG) are now obliged to collect information about their beneficial owners and to inform the register about them without delay (§ 20 para. 1 sentence 1 MLA). According to § 21 MLA the same obligations also apply to the trustees of trusts and of foundations without legal capacity or similar legal formations domiciled in Germany. The obligations to collect data and to notify the transparency register are accompanied by the obligation of the beneficial owner to provide the necessary information to the concerned companies.

A beneficial owner is any natural person holding directly or indirectly more than 25% of the share capital or controlling more than 25% of the voting rights or controlling the company in a comparable manner (§ 3 MLA). Such indirect control is in particular the case when the shares are held by another company which is controlled by a natural person. This also includes shares nominally held by a trustee for the beneficial owner. Relevant is the natural person standing at the end of a chain of participations.

Under § 19 para. 1 MLA the transparency register shall receive the following information about the beneficial owner: first and last name, possibly nationality, date of birth, place of residence as well as the nature and scope of the economic interest. The information about the nature and scope of the economic interest shall illustrate what makes the person a beneficial owner. This includes, in particular, the size of the shares or of the voting rights, but also a possible function of the beneficial owner as a legal representative, managing director, shareholder or similar functions, which allow the owner to control the company in other ways.

If the relevant information is already published in electronically retrievable documents and records in German public registers then the companies is exempt from this obligation to provide information about the beneficial owner again. That concerns registrations in the commercial register or partnership register or associations register. I.e. companies which shareholders are natural persons do not have to provide information to the transparency register.

However, if the shareholder is another legal person or a trust, the company is affected by the reporting requirement. This applies, in particular, if the shareholder is a foreign legal person because information about its ownership structure is generally not available in German registers.

Violations of the reporting obligations could be sanctioned with a regulatory fine up to EUR 100,000.00.

In case of doubts about the fulfillment of reporting obligations by the published information in other German registers the company should report the necessary data to the transparency register. The company also has to notify about any subsequent changes of the beneficial owners without a special request of the register. It is advisable to install a monitoring system for continuous updating.

The transparency register is run by Bundesanzeiger Verlag under the following link: https://www.transparenzregister.de.

Please do not hesitate to contact our lawyers if you have any questions regarding the reporting requirements and rights of access to the data of the transparency register.

Rechtsanwalt Alexander Shmagin

dmp@derra-b.de

10/2017

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