date | theme

15.06.2019 | Division of operations: Requirements – Legal consequences – Avoidance

17.06.2019 | Legal consequences in the split of operations

19.06.2019 | Personal integration: domination – groups of people – relatives (this article)

21.06.2019 | The material interdependence in the split operation

24.06.2019 | The minority shareholder at Besitz-GbR

27.06.2019 | The Wiesbaden model: avoiding the division of businesses with spouses

Holding company | Operating company

Partner A | 70 % | 70 %

Partner B | 30 % | 30 %

Holding company | Operating company

Partner A | 60 % | 40 %

Partner B | 40 % | 60 %

Holding company | Operating company

Partner A | 95 % | 5 %

Partner B | 5 % | 95 %

Holding company | Operating company

Partner A | 40 % | 20 %

Partner B | 20 % | 25 %

Partner C | 15 % | 40 %

Partner D | 25 % | 0 %

Partners E | 0 % | 15 %

A prerequisite for the division of operations is the human integration. This is the case when one or more persons together control both the holding company and the operating company in the sense that they are able to enforce a single will to do business in both companies.

In the video we show you various strategies to avoid a division of operations in advance, as well as in retrospect or to consciously maintain it.

1. Participation identity in the context of human integration

When it comes to the identity of participation, the unified will to do business and work is most clearly visible. [24] This is the case if the same persons are involved in both companies in the same percentage ratio. [25] In this case, it is difficult to imagine that the unity is cancelled out by a permanent conflict of interests between the shareholders. [] 26]

Table 1: Participation identity

2nd identity of control in personal connection

For the existence of a uniform will to do business and activity, it is also sufficient that the group of persons who actually control the holding company is also able to enforce their will in the operating company.[27] If a group of persons – and only these – participates in the holding company and the operating company to different levels, the uniform will to do business and activity is basically given and the identity of control is affirmed. [28] This is because it is assumed that it is a purpose-driven association of these people and not a coincidental meeting. The single will to act is to be affirmed even if the unanimity principle applies to one of the two undertakings. The identity of control is also to be assessed positively if one partner disposes of the majority of the shares in the operating company and the other of the majority in the holding company. [] 29]

Table 2: Control identity for participations of only the same persons in holding companies and operating companies

On the other hand, the identity of control is denied if the shareholding in the ownership and operating company is extremely contrary. The same economic interests are no longer assumed in this constellation. [30] However, it is not conclusively clarified at which shareholding ratio extremely contrary shareholding relationships exist. The case-law has so far been based on personal connections in cases where the shareholding ratios were 55 % to 45 %[31], 60 % to 40 %[32] and 80 % to 20 %[33] in the case of the holding company and inversely in the case of the operating company.

Table 3: Contradictory participation

Control identity is to be assumed even if the parties involved are not all involved in both the ownership and the operating company, but the persons involved in both companies are involved in both companies together with more than 50 %[34] and the majority principle applies in the ownership company for ordinary business activities.[35] Exactly 50% of the voting rights do not guarantee a control identity here.[36] The voting rights of the parties involved in both companies are to be summarized, which is the case law with the so-called person group theory. Jurisdiction assumes that these persons pursue the same economic interests as a group of persons. This requires neither contractual ties nor special corporate law.[37] In addition, the influence of the individual is not important, it is crucial that the persons unite by harmonizing their interests and thus actually enforce their will in the dual society. [38] The degree of participation in both companies is irrelevant for the individual.

Table 4: Person group theory

According to the group of persons theory, there is a personal connection, since persons A, B and C form a group of persons, since they are involved with more than 50% in the ownership and operating company. A uniform willingness to engage in business is denied if there are actually conflicts of interest within the ruling group of people.[39] Contradictions of interest are only important if they are not only latently present, but their existence through concrete facts such as e.g. by legal disputes between the persons belonging to the group of persons.

4th sole operating partner

In the case of the sole operating partner, a shareholder of the operating company is not involved in the holding company. Here it also depends on the constellation of the company structure. If several persons are involved in both companies and only one shareholder as sole operating shareholder, then it must be checked whether the theory of group of persons applies or not. The single will to act is denied if the joint shareholders can exercise minority rights and thus oppose the single will to act. [] 40]

5th ownership-only company

The sole shareholder is a shareholder who does not participate in the operating company but participates in the holding company. If the working capital company has one or more shareholders not participating in the holding company, the theory of groups of persons must also be examined here. If the shareholders who hold shares in both companies together have the majority of the shares and thus the simple majority of the voting rights or if the share of the sole shareholder is greater than 50%, the requirement of unanimity in management applies to the holding company by law or contract not only for the exceptional transactions, but also for the transactions of daily life, according to the case law of the BFH for only minimally participating sole shareholders or shareholders. -community, the identity of control and thus the personal interdependence.[41] Due to the right of objection of the owner-only shareholder, the dual shareholders are not in a position to enforce their will to act in the ownership company. [] 42]

6. Aggregation of shares of close relatives for personal integration

For the assumption of a personal connection, the mere marital relationship with the majority shareholder is not sufficient. If the spouses participate both in the economic goods provided for use and in the operating company, these can form a closed group of persons, like third parties who are foreign to each other, the majority of whom control both companies.[43] However, the aggregation is inadmissible if both are involved only in the assets made available for use or only in the operating company. [] 44

On the other hand, a gift between the spouses, which is freely revocable, or in the event of revocation in the event of divorce, constitutes a personal connection.[45] If the spouses live under the property regime of the community of property and if both the economic property provided for use and the majority of the shares in the working capital company belong to the total property, then the conditions of personal connection are fulfilled. Unless there are actual conflicts of interest. [] 46]

7. factual mastery

If the person or group of persons controls only one of the two companies, but because of an economic pressure potential in the other company can enforce his or her business will, the de facto control is present.[47] In order to assume effective control, it is necessary that the party under company law is dependent on the circumstances of the individual case to subordinate himself to the will of another in such a way that he cannot develop his own commercial will. Such a de facto position of power lies e.g. For example, if a shareholder provides the company with indispensable operating bases which he can withdraw from the company at any time.[48] The circumstances of the individual case are always decisive for the existence of effective control. Years of conflict-free cooperation alone do not allow the conclusion to be drawn of a factual domination any more than a mere marital relationship. 49]