The purpose of the vast majority of companies with limited liability registered in the Federal Republic of Germany (GmbH) is to generate financial profits. Against this background, it is very useful to know what restrictions the payment of a GmbH to the participating shareholders is subject to. However, this knowledge is indispensable especially for the managing directors of a GmbH, as they are the ones who usually arrange distributions and, if necessary, are liable privately for violations. The following article provides a rough overview of the principle of capital conservation and its consequences.

The starting point for the principle of capital conservation is, of course, the principle of capital raising. The GmbH shall be provided by law with a minimum share capital of EUR 25,000. The deposits taken over by the shareholders do not have to be paid in full before being entered in the commercial register (see § 7(2) GmbHG). However, the GmbH can claim the remaining amounts at any time. In addition, a waiver of the deposit obligations and a set-off with claims of a shareholder against the GmbH is prohibited by law (see § 19 paragraph 2 GmbHG). In this way, the full raising of assets equal to the statutory share capital is legally ensured.

2nd purpose of the principle of capital conservation

The principle of capital conservation standardized in § 30 GmbHG stipulates assets of the GmbH as earmarked working capital up to the amount of the statutory share capital. This statutory measure ensures the minimum of the liability capital of a GmbH from the unlimited access of its shareholders. For this purpose, § 30 (1) sentence 1 GmbHG establishes a fundamental prohibition on the payment of share capital to the shareholders. Here, the strict preservation of capital primarily serves as a compensation for the comprehensive limitation of liability of the GmbH, according to which the shareholders are not liable for debts of the company. In addition, the entrepreneurial risk is extended to the shareholders. Operating losses, which cannot be excluded by the principle of capital conservation, must first be offset by the profit achieved up to the level of the share capital before a profit distribution is considered.

Furthermore, in the election campaign a GmbH with tied assets was thrown into the room by various parties. No distributions to the shareholders should be possible and the generated assets should serve exclusively the company. The shareholders receive a generous salary and a pension protection. In addition, there should also be requirements for the liquidation of the legal form, whereby only charitable foundations or another GmbH with tied assets as beneficiaries come into question. However, we have to wait and see, as this project may take some time.

A payment by the GmbH to the shareholders is accordingly – as a consequence of the principle of capital conservation – inadmissible, if the company assets lose the amount of the statutory agreed share capital by the payment. This asset constellation is called an underbalance sheet. The disbursement prohibition applies equally in the case of an underbalance already existing before the disbursement and an underbalance arising from the disbursement. In addition to the underbalance sheet, the payment ban also applies to cases of over-indebtedness.

3.1. Capital conservation: the role of share capital

The share capital serves as a fixed invoice digit. If this clearly defined and ascertainable value is not reached by the company assets, the payout lock intervenes. Decisive is the share capital agreed in the GmbH’s social contract and entered in the commercial register. It is irrelevant in this respect whether shares have been withdrawn by the GmbH in the meantime or the company has acquired its own shares.

3.2. Calculation of the undershoot

Since the share capital is fixed as an accounting variable, the calculation of the sub-balance sheet depends on the concrete calculation of the company assets. In this context, the company’s assets are normally calculated in accordance with the general accounting principles using the up-to-date book values. However, hidden reserves are generally not taken into account in the calculation.

By the way, the relevant time for the assessment of the existence of an underbalance sheet is the payout time.

3.3 The creation of the shareholder

In accordance with the purpose of the standard, the prohibition on payment relates almost exclusively to payments made by the GmbH to shareholders. Whoever is considered a shareholder within the meaning of the prohibition is basically determined by the list of shareholders deposited in the commercial register. In special individual cases, however, payments to third parties (= non-partners) may also violate the prohibition on payment of § 30 GmbHG. This comes into consideration in particular in the case of payments by the GmbH to indirect shareholders (for example, trustees) or persons close to a shareholder.

The relevant date for the valuation of the creation of the shareholder is, in contrast to the valuation of the existence of the underbalance sheet, the date of the justification of the payment obligation.

3.4. Capital conservation: the term payout

The legal use of the term “payment” of § 30 GmbHG is misleading. § 30 (1) sentence 1 GmbHG prohibits not only payment of money by the GmbH to shareholders in violation of the prohibition of payment, but also all services provided by the GmbH to a shareholder that reduce the company assets from an economic point of view. Therefore, in principle, the assumption of liabilities of a shareholder is also affected, for example.

4.Exemptions from the prohibition on capital conservation

In individual cases, the law opens up the possibility of making a legally permissible payment of the GmbH to a shareholder contrary to the fundamentally applicable payment prohibition. The relevant exceptions are directly regulated in § 30 (1) sentence 2 and 3 GmbHG.

4.1 Coverage by full repayment or consideration claim

If the payment of the GmbH to the shareholder is covered by a full-fledged claim for repayment or consideration against the shareholder, the company does not violate the prohibition of payment by the payment. In this respect, it is irrelevant whether the exchange of services between GmbH and shareholders takes place in the interest of the GmbH. The claim for repayment or consideration covers the performance of the GmbH, if this corresponds at least to the market value of the payment by the GmbH. In addition, the GmbH’s claim against the shareholder must be full. This is the case insofar as it can be assumed with a high degree of certainty that the shareholder can perform his performance at the time of maturity. For this, a prognosis decision must be made from the perspective of a reasonable merchant. The relevant time for the assessment of the full value is the time of payment by the company.

4.2. Control or profit transfer agreement

If there is a control or profit transfer agreement between two companies (within the meaning of § 291 AktG), a payment of the controlled GmbH on the basis of this contract does not violate the capital conservation principle. This exception is a consequence of the abolition of the capital conservation principle in the context of domination or profit transfer agreements with respect to the controlled GmbH. In return, however, the controlling company undertakes to assume full losses vis-à-vis the controlled GmbH.

Preservation of capital: legal consequences in case of breach of the payment ban

If a payment violates the legal prohibition of § 30 GmbHG, there is first of all a corporate reimbursement obligation according to § 31 paragraph 1 GmbHG. Of course, this obligation applies to the shareholder beneficiary of the inadmissible payment of the GmbH. If the payment was made by the Managing Director of a GmbH for the company, the Managing Director is also personally liable for the replacement of the transferred share capital (§ 43 (2) sentence 1 GmbHG). However, compensation obligations against the instigators are also possible, provided that the payments were initiated by shareholders or authorized representatives. In practice, however, the payment by a managing director should be the rule, which is why they should always keep an eye on the assets in the context of payments to shareholders.

Among other things, civil claims against shareholders due to a subsistence-destroying intervention in the company assets are also conceivable. In such a case, the shareholder is obliged to pay damages as internal liability towards the GmbH. Similarly, an unlawful payment of company assets may have criminal relevance with regard to the criminal offence of infidelity (§ 266 StGB).