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The new corporate law since 1.1.2023

On January 1, 2023, the revised corporate law came into force, bringing innovations for both stock corporations (AG) and limited liability companies (GmbH). The update of the corporate law has been adapted to the new accounting law and provides companies with more flexibility in terms of formation and capital provisions. This article presents selected innovations and explains the resulting need for action for small and medium-sized companies.

What are the changes?

In addition to some innovations that exclusively or predominantly affect listed stock corporations, numerous impracticable provisions have been adjusted or repealed. These adjustments affect small and medium-sized companies in particular and may have an impact on organizational structure and processes.


Share capital and reserves

The share capital can be newly issued in certain foreign currencies if this is essential for the business activity. A change must take place at the beginning of each financial year and must be approved by the General Meeting. In addition, the minimum nominal value for shares has been abolished. Any nominal value greater than zero is now permissible.


Furthermore, the General Meeting may decide on a capital band. This authorizes the Board of Directors to increase or reduce the share capital within this band for a maximum of five years. A reduction is only possible if at least the limited audit is carried out. In addition, the procedures for capital increases and decreases have been adapted or simplified.


In the future, it will also be easier to form a company if an acquisition of tangible assets from the founders or the payment of capital by offsetting receivables is planned.

In addition, interim dividends have been anchored in the law. Such dividends can now be resolved by the General Meeting. For this purpose, interim financial statements must be prepared, which must also be revised depending on the audit requirement.

Shareholder rights

Shareholders who together hold at least 10% of the share capital may request that a General Meeting be convened. There is now also a right to add items to the agenda if 5% of the votes so request. Shareholders with more than 10% of the share capital can now also ask questions outside the General Meeting, which the Board of Directors must answer. The Board of Directors has four months to do so. These answers must also be made available for inspection by all shareholders at the next General Meeting at the latest.


The right to inspect business records is also possible if requested by shareholders who together hold more than 5% of the capital or votes, provided that this is necessary for the exercise of their rights and that no business secrets or overriding interests of the company are thereby affected.


The annual report and the auditors' report now only have to be physically delivered or made available if they are not made available electronically.


Furthermore, resolutions of the Universal Meeting of Shareholders (meeting without complying with the formal requirements for convening a General Meeting) can be passed in writing or electronically. However, if a shareholder or partner requests a discussion, a corresponding resolution cannot be passed electronically or in writing.

The possibility of holding a General Meeting electronically, which was already introduced on a temporary basis by the COVID Regulation, will now be permitted under certain conditions even after the temporary provisions have expired. In this context, high demands are placed on the technology, as the exchange of opinions and correct procedure must be ensured. For a meeting to be held electronically, the Articles of Association must expressly permit this.


Board of Directors

Board members can now also pass resolutions electronically or in writing, provided that no member requests a discussion. Furthermore, a circular resolution does not require a signature.

The Board of Directors are now expressly obliged to monitor the liquidity of the company and to take appropriate measures to ensure the solvency of the company. In the event of imminent insolvency, the Board of Directors is obliged, analogous to the provisions in the event of a loss of capital, to take measures to restructure the company. In this context, the requirements for a valid subordination have been newly defined in law. Such a subordination must include the amount owed as well as the interest claim for the duration of the over-indebtedness. Furthermore, an over-indebted company without an auditor must now submit its last annual financial statements to a limited audit.

Need for action for SMEs

Companies that were founded before January 1, 2023, must adapt their articles of association and internal regulations to the new law during the transition period of two years. There is therefore time until December 31, 2024 to make the necessary adjustments. Provisions that are not adapted to the new corporate law by this date will then lose their validity and the statutory provisions will apply. In order to avoid the risk of statutory provisions contradicting the law, we recommend that the appropriate adjustments be made.

The Articles of Association also need to be amended to allow General Meetings to be held electronically in the future. For such an amendment, a General Meeting resolution including public deed is required.

It is therefore worthwhile to adapt the current provisions of the articles of association as well as the relevant company documents to the new corporate law.

We will be happy to assist you in reviewing your business documents and making the necessary adjustments. So that you can benefit from the modernization in the future. Please contact us if we can help.

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