In practice, in certain constellations it may be in the interest of a GmbH to acquire its own shares from an outgoing shareholder. The acquisition of own shares can serve various purposes. These include, inter alia, preparation for the collection of shares, preparation for the participation of employees in the company, the severance payment of shareholders and the repurchase of fiduciary shares. The following article illuminates the company law requirements and consequences of the acquisition of own shares by the GmbH.

In principle, a GmbH is legally permitted to acquire its own shares. When carrying out such a transaction, the company is, as usual, represented by its managing director (§ 35 GmbHG). However, the acquisition of own shares by the GmbH is not an act within the framework of normal business operations. In particular, the transfer of the shares to the GmbH shifts the majority of the other shareholders (cf. 5.). Therefore, the managing director is in principle obliged to inform the shareholders about the planned acquisition or to obtain their consent.

2. Limitations on the right to work

However, the legal possibility of acquiring own shares is legally restricted by § 33 GmbHG in several respects. The statutory provisions of § 33 GmbHG pursue the purpose of protecting the stock of share capital. In this respect, § 33 GmbHG serves as a supplement to § 30 GmbHG, which prohibits, among other things, distributions of the GmbH to the shareholders in the share capital of the GmbH. The following legal restrictions are mandatory law and as such not to be circumvented by deviating agreements (e.g. by a social contract).

2.1. Acquisition of unpaid shares

§ 33 Abs. 1 S. 1 GmbHG

The acquisition by the GmbH of shares whose obligation to make a contribution (e.g. cash contribution in the case of the founding of a GmbH) was not paid in full by the respective shareholder is inadmissible. The reason for this statutory regulation is the fact that a GmbH, on the basis of the principle of raising capital by virtue of law, may not waive the claim for the full payment of the contributions against the shareholders (§ 19 para 2 p. 1 GmbHG). However, the acquisition of non-fully paid-in shares by the GmbH would result in the company having a claim against itself. This is not legally possible in principle. The right to the deposit would thus be extinguished (‘confusion’) and the GmbH would effectively waive the outstanding claim.

2.2. Fictional formation of a reserve equal to acquisition costs

§ 33 Abs. 2 S. 1 GmbHG

In contrast to not fully paid shares, a GmbH is in principle free to purchase fully paid shares itself. However, it is subject to a capital conservation restriction. The company may also acquire fully paid shares only if sufficient free assets are available to it at the time of acquisition. The free assets may include neither the share capital nor the reserves to be formed in accordance with the social contract, which may not be used for payment to shareholders. The legal requirement of the fictitious formation of a reserve in the amount of the acquisition costs ensures that the GmbH can only acquire the shares insofar as the company law principle of capital conservation is not affected. If the GmbH does not have enough free assets to pay the acquisition costs, the acquisition of its own shares must be refrained from.

The decisive point in time for the assessment of the GmbH’s asset situation is controversial in the relevant specialist literature. In any event, the inadequacy of the assets of the company at the time of payment should lead to the inadmissibility of the acquisition of the shares due to the purpose of preserving the capital.

2.3. Specific case: ‘Keinmanngesellschaft’

If the two aforementioned conditions are met, even the acquisition of the shares of a sole shareholder is initially effective and legally valid, although the details in the specialist literature are very controversial. This creates a GmbH without shareholders and without a functioning organ of decision-making (shareholder meeting). Since this situation is incompatible with the civil understanding of an organic association, the company should provide a timely remedy. In any case, the “Keinmanngesellschaft” is a ground for dissolution within the meaning of the GmbHG.

In connection with certain conversion processes according to the Transformation Act (UmwG), a GmbH has to resign its outgoing shareholders in individual cases. For the purpose of such severance payments, a GmbH is entitled to acquire the shares held by the outgoing shareholders itself. Although the GmbH must also be available in this case sufficient free assets (cf. 2.2.). The special feature, however, is that it is the GmbH in the cases of § 33 Abs. 3 GmbHG is exceptionally permitted to acquire non-fully paid-in shares. The provision accordingly provides an exception to the restriction of § 33 Abs. 1 S. 1 GmbHG. This derogation shall apply to severance payments under the following conversion operations: