23. Jan 17

GmbH and establishing a supervisory board later on

If a GmbH decides to set up a supervisory board at a later stage, this needs to be certified by a notary and entered into the commercial register even if there is an opening clause.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: A Gesellschaft mit beschränkter Haftung (GmbH for short), a type of German private limited company, is not typically obligated to establish a supervisory board. Having said that, it can incorporate a so-called “Öffnungsklausel” (opening clause) into the articles of association in order to maintain the option of setting up a supervisory board at a later date. Setting up what is termed a “fakultativer Aufsichtsrat” (optional supervisory board) for a GmbH based on this kind of opening clause is quite a common practice. However, the Kammergericht (KG) Berlin, Berlin’s Higher Regional Court, highlighted the limitations in its ruling of July 23, 2015 (Az.: 23 U 18/15).

The 23rd Civil Division of the Kammergericht held that the decision to subsequently establish a supervisory board for a GmbH needs to be certified by a notary and recorded in the commercial register even if an opening clause exists.

In the case in question, differences of opinion had apparently emerged among the shareholders of a GmbH. A number of shareholders representing a 63 per cent majority of votes resolved to set up a supervisory board based on the opening clause in the articles of incorporation and appointed three supervisory board members. Not long afterwards, the supervisory board removed the managing director from his post, who was also a shareholder of the GmbH. The KG Berlin had to rule on whether this dismissal had been effective.

The Court concluded that the managing director had not been effectively removed from his post, as the supervisory board’s establishment had not been valid in the first place. In accordance with sec. 53(2) of the GmbH Gesetz (GmbHG) [Act regulating GmbHs], a resolution effecting a change to the articles of association has to be certified by a notary. The Court stated that there needed to have been a 75 per cent majority of the votes cast for this to happen. Moreover, a change to the articles of incorporation would then only become effective once it had been entered into the commercial register. Neither of these conditions were met in the present case. It went on to say that the conditions would only cease to apply as a result of an appropriate opening clause if the changes to the articles of incorporation were specific and not indefinite, which was said to not be the case when establishing a supervisory board.

The Kammergericht’s ruling may well prove to be a momentous decision, because setting up a supervisory board for a GmbH at a later date is not uncommon. To ensure that there is legal certainty, lawyers who are versed in the field of company law can be consulted as early as the stage at which the articles of association are drafted.

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