13. Feb 17

Company officially removed from commercial register due to lack of assets

It is possible for the removal of a company from the commercial register to be instigated by the competent authorities due to a lack of assets. Those who wish to oppose such a move should act immediately.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Should a company no longer have any assets that can be drawn on for the purposes of satisfying creditors or distributing among shareholders, the company may be officially removed from the commercial register. If the shareholders take the view that there are in fact still assets available, they ought to take timely action and adduce evidence to this end. This was demonstrated by a ruling of the Kammergericht (KG) Berlin, Berlin’s Higher Regional Court (Az.: 22 W 43/15).

In the case in question, the removal of a GmbH, a type of private limited company in Germany, was instigated by the relevant authorities because of a lack of assets. One shareholder’s objection to the removal was unsuccessful, as he failed to submit any documents proving the existence of assets despite being asked to do so repeatedly. Around ten years after the company’s removal from the commercial register, the shareholders resolved to continue the business. However, their attempt to re-enter the company in the commercial register failed.

The KG Berlin held that if a GmbH was removed due to a lack of assets, this entry should not be removed again solely because assets were still available at the time the decision was made to remove the company from the register.

The Court stated that while it is possible to re-enter a company in the commercial register, this can only happen if an essential condition had not been met for the purposes of removing the company due to a lack of funds. This was said not to be the case here. The Court went on to say that the shareholders had been granted sufficient time to react and lodge an appeal, but this did not occur. It ruled that the fact that assets were available at the time the company was removed from the register did not itself mean that the removal was erroneous. This is true not only if undetected assets were available, but also if they could not be ascertained in the course of the orderly investigation. This would only not be the case if the company had still been commercially active, meaning that the official application for removal would have been erroneous. Moreover, the Court noted that the company had been removed from the register for about ten years and measures long since put in place to wind up the company.

Lawyers who are experienced in the field of company law can advise on all issues concerning companies, from their founding to their dissolution.

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https://www.grprainer.com/en/legal-advice/company-law.html

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