Since November 1, 2008, according to Art. 16 of the German Private Limited Companies Act (GmbHG), the list of shareholders in the Trade Register has been upvalued. Since then, it has been regarded as the basis of legitimacy for the exercise of shareholder rights and as a starting point for the good faith acquisition of shares.
However, incorrect or old shareholders lists are still to be found in the Trade Register. As a result, shareholders' resolutions may become void, profit-sharing rights may be disputed, or even share transfers may be declared invalid. These inaccurate lists, therefore, represent a considerable potential for liability risks for the company, the shareholders, and the managing director(s).
If not all formally entitled shareholders are invited to the shareholders' meeting, the shareholders' resolutions are threatened with nullity. As a consequence, decided and settled investments will not have been enacted effectively.
A shareholder who is no longer entitled but is still registered with the Trade Register sells his shares to a third party. The third party then becomes a shareholder if they are registered in the Trade Register because they have made an acquisition in good faith.
Therefore, it is of great importance that the list of shareholders in the Trade Register should regularly be examined for accuracy. In addition, the provisions of the new Money Laundering Act of June 23, 2017 regarding the creation of the Transparency Register and the resulting reporting obligations must also be observed.
MBA for Finance and Financial Services (UK), Steuerfachwirt (GER)