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U4-Membership in companies - Coggle Diagram
U4-Membership in companies
Rights and duties of shareholders
duties
financial duty
each member has to pay his/her contribution
Shareholders in AG does not have a duty to pay anything else
duty of loyalty
against the company
against other shareholders
shareholder competes with the company in its line of business
Do members have to take the company interest when deciding on distribution of profits
general principle
rights
financial rights
entitlement to receive dividend
secondary financial rights
entitlement to receive a proportional part of the proceeds of liquidation
preemptive right
->shareholders share does not decrease that much
new shares are issued at discount price->loss of value for the old shares
voting right
one share one vote - default rule
mandatory for AG, not for GmbH
2 exceptions
preferential shares
voting caps
shareholders can be barred from voting
information rights
AG
Shareholders can request management for any specific necessary as long as is related to the meeting's agenda
Outside of general meeting, shareholders cannot force management to provide info on certain issues
GmbH
right to inspect company's books
general right to information
Shareholder resolution
AG
general meeting
annual general meeting
any extraordinary GM
usually directors call for this meeting
chairman of BOS chairs the meeting
only points on the agenda are dealt with unless all shareholders agree
right to participate for each shareholder
issue of rational apathy
forms of distant participation
authorisation of a third party (proxy)
pressure to cast their votes
GmbH
general meeting
directors or members call the meeting
announcement at least 7 days prior to the meeting
only points on the agenda are dealt with unless all shareholders agree
in order for the meeting to be valid, 10% of members or proxies have to be present
law does not specify who chairs the meeting
members can do a resolution outside a meeting and announce the resolution in written form
Minority shareholders protection
shareholder resolution
consent of all parties for e.g changing statue of the company
Individual consent
3/4 majority as a default rule for important issues
bargaining for need of supermajority of 90 for more issues in the company
substantive requirements
equal treatment for shareholders in the same circumstances
duty of loyalty towards other shareholders
requirement of justification of certain resolutions
this is all controlled by a third party
Minority rights (usually tied to a certain minimum percentage of shares)
court appointed special investigator for shareholders with more than 10% of shares
Board representation
appointment part of the BOS or BOD
Tunnelling
related party transaction
Transfer of Membership
AG
registered shares - general rule
bearer shares for listed AG
global certificate for unlisted AG
GmbH
members are entered into the business register
transfer of membership is more cumbersome -p270
Controll of membership
restriction of transferability of the shares in the company's statue
transfer without company's directors' approval is invalid
subcontract between all or some shareholders
Involuntary transfers
"squeeze out" right
compensation packages