In order to successfully manage a limited liability company (GmbH), the shareholders have to make numerous entrepreneurial and administrative decisions. The processes of decision-making of a GmbH are specified more strictly than in a partnership. In particular, the shareholders’ meeting plays a central role in this regard. In it, the shareholders make the important shareholder resolutions according to the legal model. However, the deviations allowed within certain limits from the legal requirements offer the shareholders different design options.

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1. The basics of decision-making in the GmbH

The decisions in the ordinary business operations of a GmbH are basically the managers responsible. However, the managing directors of a GmbH are bound by instructions to the shareholders’ meeting, § 37 Abs. 1 GmbHG. Due to the power of instruction, the shareholders’ meeting can take decisions of the business and make them themselves by shareholder resolution. In addition, the GmbH Act (GmbHG) in § 46 GmbHG expressly mandates the responsibility of the shareholders for certain business areas. This includes, among other things, the approval of the annual accounts and the use of the result as well as the appointment and removal of the managing directors. Conversely, the managing directors are not responsible for the areas listed in § 46 GmbHG. In addition, parts of the specialist literature represent that the managing directors must also obtain the approval of the shareholders for other unusual measures of business operations.

The shareholders may deviate from these legal requirements by individual provisions in the company contract. In principle, this makes it possible, on the one hand, to extend the responsibilities of the shareholders over the legally assigned regulatory items. On the other hand, the rights and responsibilities of managing directors can also be strengthened by an extended competence catalogue. However, it should be noted that certain core areas must necessarily remain within the area of responsibility of the shareholders. This applies in particular to the subject-matter of the use of profit and the amendment of the articles of association.

2. The shareholders’ decision

SEGMENT006 2.1. Voting rights under the shareholder resolution

2.1.1. Basics, transferability

Shareholder resolutions of any kind come about by the votes due to the shareholders. Voting rights are an essential component of the creation of a shareholder. As such, by virtue of the law, they are inseparably linked to the share of the GmbH. Due to this so-called separation ban, voting rights without the corresponding share of the business cannot be transferred. Thus, the voting rights as highly personal rights are exclusively to the GmbH shareholders; a separate transfer is also inadmissible with the consent of the other shareholders. In contrast, it is generally permissible to form non-voting shares in a GmbH. However, the legal approval rights of the shareholders always remain in this case.

Despite the prohibition of separation, it is permissible to authorize other persons to exercise the right to vote within the framework of a shareholder resolution, §47 para. 3 GmbHG. In principle, the power of representation can be granted both to joint shareholders and to third parties. However, co-shareholders are subject to the restrictions of § 181 BGB (prohibition of self-business), especially in the context of amendments to the articles of association. In any case, the authorization must be in text form (§ 126 b BGB). Deviating from the statutory requirements, the articles of association may exclude the possibility of representation within the framework of shareholder resolutions in the case of factual reasons or be linked to special characteristics of the permitted representatives. In this respect, for example, professional groups obligated to maintain confidentiality (lawyers, auditors, tax consultants) or family members are considered. Similarly, in the case of factual reasons, the statutes may permissibly provide for a representation obligation in individual cases. This construction is particularly useful and common in the participation of communities of heirs as partners.

2.1.2. Voting Binding Contracts

In principle, the GmbH shareholders decide on the exercise of their voting rights in accordance with their own free will and discretion. However, it is generally permissible for partners to undertake to exercise their voting rights in a certain way in contractual agreements with other persons. Such contracts are referred to as voting binding contracts. The conclusion of a voting agreement is not subject to any formal requirement. However, the contract is ineffective if it violates legal or statutory prohibitions. For example, remunerated voting-bonding contracts are as void as contracts intended to circumvent the ban on secession or a viculation clause. In this regard, it is not conclusively clarified whether the partnership agreement of a GmbH can exclude voting binding agreements of the shareholders. In any case, an obligation of the shareholders to refrain from voting agreements may well be justified.

2.1.3 Duty to vote, prohibition to vote

In contrast to an OHG, the shareholders of a GmbH are generally not subject to any obligation to participate in shareholder resolutions. However, there are exceptions to this principle. Thus, all shareholders must participate in the approval of the annual accounts. In addition, corporate fiduciary duty can even lead to a substantive vote binding in individual cases. Insofar as a shareholder is subject to a voting ban, he is excluded from participating in a shareholder resolution. The exclusion of the voting ban is in § 47 Abs. 4 GmbHG regulated by law. The cases regulated in this provision relate exclusively to conflicts of interest between the affected shareholder and the GmbH. In these cases, even an indirect concern of the shareholder may suffice to trigger a vote ban. In this respect, deputy representation of the shareholder concerned in the context of a shareholder resolution to circumvent the voting ban is inadmissible.

The social contract of a GmbH may extend the voting prohibitions to non-statutory constellations. However, a deviation from the statutory voting prohibitions by the social contract, if at all, is only permissible insofar as this does not violate good morals (§ 138 BGB). In any case for legal transactions between a shareholder and the GmbH (§ 47 ABs). 4 S. 2 GmbHG), the granting of voting rights is partially considered admissible.

The decisions falling within the scope of responsibility of the shareholders are in principle to be taken in a GmbH in the context of a shareholder meeting by shareholder resolutions, § 48 para. 1 GmbHG. The presence of all shareholders is required. Accordingly, the law lays down different regulations to ensure the presence of the shareholders. In §§ 49 – 51 GmbHG, the legislature regulates in detail the competence and formal provisions regarding the convocation of the shareholders’ meeting. As a rule, the convocation must be made by the managing director by means of registered letters, § 51 Abs. 1 S. 2 GmbHG. In addition, the statutory loading period of at least one week must be observed, § 51 Abs. 1 S. 1 GmbHG. While the shareholders have a right to attend and speak from their membership with regard to the shareholders' meeting, the managing director only has a duty to participate after the shareholders' instructions. On the other hand, the managing directors have no right of their own to participate in the shareholders' meeting.

Although a shareholder resolution is usually made within the framework of the shareholders' meeting, resolutions are also legally permissible outside the meeting, § 47 para. 2 GmbHG. In this respect, unanimous resolutions on shareholders may be adopted in text form. On the other hand, resolution by vote requires on the one hand the approval of all shareholders and on the other hand the stricter written form (§ 126 BGB). In principle, the articles of association may provide for provisions which deviate from the principles set out above. In particular, the requirement of a shareholders' meeting and the charge requirements can be individually arranged.

2.2.2. Form of the shareholder resolution

If the shareholder resolutions of a GmbH are made within the shareholders' meeting, there are in principle no formal or logging requirements. However, the law makes an express exception to this principle at Einmann GmbH, § 48 Abs. 3 GmbHG. For example, the sole shareholder of a GmbH must record and sign its resolutions for documentation purposes. Nevertheless, the documentation of the shareholder resolution is also useful and recommendable in other GmbH forms. Furthermore, the law prescribes the notarisation of the order in special individual cases. This is the case in particular in the case of amendments to the Statutes and conversion decisions.

2.2.3. Majority requirements

According to the legal requirements, a shareholder resolution is usually taken by a simple majority of the votes cast, § 47 para. 1 GmbHG. The voting rights of a shareholder are based on the respective GmbH shares, whereby each euro of a share grants one vote, § 47 para. 2 GmbHG. Meanwhile, the law requires a qualified majority for certain decisions. For example, an amendment to the Statute can only be adopted by a majority of 75% of the votes. However, the legal majority requirements are also largely not mandatory. In this regard, the shareholders may also agree on different provisions in the articles of association. These include, for example: