German Shareholders

Shareholders of German companies

The shareholders of German companies may be individuals or corporations legally holding shares in private or public companies. In the case of German limited liability companies (GmbH) the shareholders are the owners of the companies. Shareholders have certain rights based on the number or class of shares they own in a company. Shareholders in Germany are divided into a majority and minority shareholders. Shareholders are also regarded as financial supports of the company.

The role and the duties of shareholders of German companies

The German Commercial Law is the main legal framework establishing how companies are registered, the minimum share capital required and the minimum number of shareholders the company must-have. It also establishes what the role, duties, and responsibilities of German shareholders are. Even if the shareholders do not manage a German company, their main role is appointing the managers and directors. They are also entitled to remove directors from their positions. German shareholders also have the role of attending the annual general meeting and any other extraordinary meetings.

The rights of German shareholders

Depending on the type of German company, the shareholders may have different rights. Shareholders of German public companies will usually have specific rights. However, there are certain universal rights applying to all types of shareholders. Among these are:

• - the right to vote,
• - the right to call the annual general meeting and other special meetings,
• - change the German company’s Articles of Association,
• - the appointment of auditors,
• - the right to raise or reduce the company’s capital,
• - the right to dissolve the German company.

With respect to German public companies, the shareholders’ right to vote depends on the number and type of shares a shareholder has. Our German attorneys will provide you with more information about the types of shares a company can have.

German shareholders may also pass ordinary or special resolutions. Ordinary resolutions are passed if a simple majority of the shareholders vote in favor of the motion, while special resolutions are passed if 75% of the shareholders vote in favor of the proposal.

For complete information about the rights and responsibilities of shareholders, you may contact our law firm in Germany.