date | theme

26. June 2020 | Competition ban for GmbH shareholders – legal perspective

25. September 2020 | Right of access and right of inspection of a GmbH shareholder

05. July 2022 | Intervention liability on GmbH shareholders

06. June 2022 | List of shareholders at the GmbH and their legitimacy (§ 16 GmbHG)

05. December 2022 | Right of withdrawal of the shareholder at a GmbH: Requirements and legal consequences (this contribution)

Apart from the special case of § 27 (1) GmbHG, the GmbHG contains no further provisions regarding the right of withdrawal of the shareholder. In the meantime, however, an extraordinary right of withdrawal is recognized for a special reason. In the following we explain its conditions and the legal consequences.

In the video we explain to you which are the five most important tax advantages in a GmbH and how you can use them.

The GmbHG knows no right of withdrawal of the shareholder. There was a bill that contained one. This has not been pursued. Rather, the right of withdrawal is now recognized by way of further legal training. Its dogmatic starting point is the regulatory principle laid down in § 314 BGB that a permanent legal relationship must be cancellable if there is a relevant reason. Therefore, the power to withdraw the shareholder to an indispensable elementary right manifests itself. The right of withdrawal of the shareholder may not be excluded or restricted by the articles of association. Corresponding clauses are therefore ineffective. However, extensions or clauses are possible that regulate the modalities of the withdrawal or determine the type and amount of the severance pay.

Companies are generally entered into indefinitely. The shareholders want to jointly raise the necessary investment and know-how. Therefore, they are mutually dependent. This connection is significantly endangered by the spontaneous and arbitrary termination of a member. In order to ensure the highest possible stability of the company, a proper, i.e. a perceptible right of withdrawal at any time, is rejected. The shareholder is therefore regularly granted a right of withdrawal only if there is a special reason. This is mainly assumed when the shareholder can no longer be expected to remain in the company and there are no other possibilities for termination of membership.

However, maintaining the continued existence of the company is not conducive to everyone. A shareholder will not detach himself from his company without reason. Rather, such a decision is motivated by tensions or divisions of personal or factual cause. If these cannot be cleaned up, the company is exposed to a permanent burden. In particular, an amicable and constructive decision-making according to § 47 GmbHG is made considerably more difficult. A manifest disharmony of the association members can lead in extreme cases to a stock crisis, so that a company is not necessarily sustainable under these premises.

For the time being, the Reichsgericht has allowed an extraordinary right of withdrawal if the shareholder should be allowed an exemption from his social ancillary service obligation. The Federal Court of Justice (BGH) has further developed this approach and recognized a right of withdrawal for an important reason.

However, a proper right of withdrawal is mostly rejected. The reason for this is that such a statutory agreed vinculation in the sense of § 15 paragraph 5 GmbHG is undermined. Furthermore, the legislator has not granted the GmbH shareholder the right of withdrawal because, unlike in the case of an association of persons, he can detach himself from the company by selling his share of the business.

The extraordinary right of withdrawal of the shareholder is understood as a subsidiary remedy, which can only be applied if neither the continuation of the membership is reasonable nor any other way to terminate it is possible. A prior alternative is to consider a sale of the share. The shareholder must also accept a financial loss if the share can only be sold below its economic value. The shareholder knows from the outset the risk associated with a share transfer and cannot simply pass it on to the remaining members by leaving.

At most, if the transferability of the share is limited according to § 15 paragraph 5 GmbHG and the co-shareholders refuse their consent to its sale without any reasonable reason, a withdrawal could be conceivable. The same applies if a sale – for example due to extensive ancillary service obligations – cannot be realized from the outset or only at an unacceptably low price.

Occasionally, a proper right of termination is provided for in the Article 60 (2) GmbHG. Instead of leaving, the shareholder must then refer to this – probably more gentle for the company – possibility of leaving, unless waiting for the applicable deadlines (often only at the end of the year) is no longer reasonable in view of the conflict situation.

An exit is also inadmissible if the shareholder has other reasonable possibilities to remedy the complaint. Regularly, the shareholder must defend himself against unlawful shareholder resolutions that violate his interests primarily with the challenge action analogous to §§ 243, 246 AktG or – depending on the design of the case – with the action for annulment analogous to §§ 241, 249 AktG.

However, such behavior does not have to be promising and does not have to resolve conflicts. If the shortening of the rights of the shareholder is not an isolated case, challenge and action for annulment can no longer be a priority remedy. If the shareholders settle irreconcilable disputes, which are the subject of multiple legal disputes and thus also reach the public, this inevitably burdens the business operations overall and thwarts corporate success. In view of such a situation, the shareholder concerned must be allowed to prevent a gradual devaluation of his participation by leaving as soon as possible.

Before the resignation of the shareholder, the shareholder could file an action for dissolution pursuant to § 61 GmbHG. However, this is only conceivable if the share of the willing shareholder amounts to at least 10% of the share capital. Another factual requirement is that the important reasons mentioned in § 61 (1) GmbHG make the continued existence of the company and not only its remaining in it unreasonable for the plaintiff shareholder. The dissolution would also have to be in the interest of the other shareholders.

Therefore, the important reason for dissolution is defined from the perspective of society. The withdrawal, on the other hand, is about the fact that the individual shareholder considers his further stay in the association to be unreasonable for individual reasons. It would therefore be unlawful to refer the shareholder primarily to the action for dissolution, which would ultimately prevent the remaining members from continuing the company. Therefore, action for dissolution and the right of withdrawal are not in the subsidiarity relationship.

On leaving, the shareholder acquires a right to severance payments. However, their payment is subject to § 30 paragraph 1 GmbHG. Therefore, if the GmbH cannot raise the amount required for this purpose from untied assets, the shareholder cannot withdraw, as far as no co-shareholder or third party steps in. Then the person wishing to leave is referred to the action for dissolution. However, he is also actively legitimized if his share does not reach 10% of the share capital.

Likewise, for reasons of creditor protection, an exit is prohibited if the business share is not fully paid in. Theoretically, the person wishing to leave would have the opportunity to provide the still outstanding contribution amount or to act for a capital reduction. However, these alternatives are not practical, so that a termination of membership in this case is only possible via the dissolution action – but again without being tied to the minimum capital limit of § 61 (2) sentence 2 GmbHG.

If the shareholder has resigned, the GmbH may make use of the share at its choice by withdrawing it or acquiring it itself. If this fails for reasons of preservation of capital pursuant to §§ 34 (3), 33 (2) GmbHG and the co-shareholders are also not willing to take over the share, then the person willing to leave only the way through the action for dissolution.

In order to leave the company, the shareholder must be able to invoke the existence of an important reason. Usually, the reasons in question are distinguished according to three categories. On the one hand, these are those connected with the person of the willing shareholder, then circumstances in the circumstances of the GmbH and finally reasons that have their cause in the behavior of the co-partners.

An important reason in the person of the shareholder would be, for example, the exclusion of the assignment of his share or the continued refusal of approval by the GmbH according to § 15 paragraph 5 GmbHG. In addition, it can be based on the fact that the ancillary obligation owed has now grown into an unreasonable burden for the shareholder. Events in the privacy of the shareholder can also justify the termination of his association membership. For example, such reasons may lie in the change of residence or in the liquidation of the business share. It is necessary that the problems can be solved only by the departure of the shareholder.

In addition, the behavior of the other shareholders can also constitute a reason for withdrawal. If only one individual shareholder interferes, then it would also be possible to exclude him. However, such behaviour does not have to be reasonable for the complainant shareholder. In particular, such behaviour may burden the relationship with the other shareholders. Therefore, a possible exclusion cannot oppose the right of withdrawal.

In addition, excessive profit accruals pursuant to § 29 paragraph 2 GmbHG can also create a right of withdrawal. Admittedly, such a decision can also be combated with the challenge. However, this approach is unreasonable if the majority persists in its position. Also because a company burdened by such disputes can hardly act successfully on the market in the long term, the disadvantaged shareholder must be able to detach from it in time by leaving.

Finally, an important reason that would justify a right of withdrawal can also arise from the sphere of society. Such situations also give rise to a reason for dissolution. However, this does not preclude the right of withdrawal of the shareholder even if he has the shareholding required in accordance with § 61 (2) GmbHG.

Such a reason may lie, for example, in a profound change in the social contractual basis of business. This can be accepted in the event of a significant expansion of business activities or investments with lasting burdensome consequences for the company’s earnings and liquidity. Even if the company enters into a competitive relationship with a company of the shareholder by changing its previous field of activity, a right of withdrawal is justified.

However, it should correspond to the fiduciary duty owed by the social contract that the shareholders are obliged to stand together even in times of crisis of their mutually agreed corporation. Only if the jointly developed restructuring efforts cannot overcome the crisis, i.e. the company can no longer resolve its continuing lack of earnings, should the conditions for a right of withdrawal be given.

The assessment of the right to withdraw requires an overall balance between the shareholder’s wish to withdraw, the interests of the GmbH and the other shareholders. The fault of the conflict must also be assessed. Also contradictory previous behavior of the shareholder must be observed.

An ordinary right of termination established in accordance with the statutory provisions can avoid an abrupt departure of a shareholder. The shareholders can regulate how such an exit should be structured. In this respect, a largely unconditional and fixed deadline-bound right of withdrawal is likely to be obvious. It is thus clear to shareholders from the outset that the society they enter into is not an alliance for life, but leaves them the flexibility to react appropriately to unexpected changes and events.

The interests of the company and the co-shareholders can be appropriately asserted in the severance payment to be paid. It is advisable to measure the severance payment amount according to the full economic value of the business share – i.e. according to its market value. For this valuation, the income value method usually used in practice can certainly be agreed. However, a noticeable discount should be taken from this so that the shareholder does not make too lightly use of his right of withdrawal. In addition, payment modalities stretched in installments can be specified from the outset in order to protect the GmbH from liquidity shortages.

Even without a corresponding right of withdrawal being provided for in the Articles of Association, a determined shareholder can be enabled to terminate the membership. For example, society can accept withdrawal. However, it is not legally obliged to do so. However, it must sufficiently express its acceptance, as the company thus undertakes to pay a severance payment and liquidate the vacant share of the business.

There will also be cases in which the conditions of the extraordinary right of withdrawal are fulfilled, but the company does not recognize this and consequently refuses to pay the severance payment. Then the question arises as to how the shareholder can realize his right of withdrawal.

If the GmbH cannot pay the severance payment because it would thus violate the capital conservation rules, the willing shareholder can – as mentioned – bring the action for dissolution. He does not have to meet the minimum shareholding requirement of § 61 (2) sentence 2 GmbHG, nor do he have to explain the reasons for dissolution of § 61 (2) sentence 2 GmbHG.

If the GmbH does not fulfil the shareholder’s right to payment of the severance payment, the latter may file a claim for payment of the severance payment. Within this procedure, a decision is then made on the existence of the exit conditions.

Finally, it is also conceivable that the majority of the shareholders abusively refuse the approval of a transfer of the share. Then the willing shareholder can file a complaint for consent against the GmbH.

Ultimately, the exit must be completed. For this purpose, the shareholder must first declare his resignation to the GmbH. The declaration is not formally necessary, but is hostile to conditions and can no longer be revoked after its access. The declaration first of all has the effect that the GmbH is entitled and obliged to either collect the business share against the payment of the severance payment to the shareholder or to demand its assignment to itself, a co-shareholder or a third party. Therefore, the GmbH may not own the share in which it auctions or assigns it itself.

The shareholder agrees to the withdrawal of his share by his request. However, the share does not disappear due to the exit. Rather, it remains in the ownership of the shareholder until the GmbH has carried out the exploitation in accordance with its rightful choice. Only then does the membership of the retiring party end.

It is questionable whether the resignee can continue to exercise his member rights at the stage between the declared withdrawal and the realisation of the share. Ultimately, his interest in society should be reduced to the determination and fulfillment of his severance pay entitlement. The question therefore arises as to whether voting rights should not already be suspended at that stage.

Mostly, however, it is assumed that the shareholder still has the right to participate in the management of the company. However, this right cannot apply without restrictions. Rather, the resignee must exercise restraint in the exercise of his member rights and limit his initiatives to measures that affect his financial interest in the enforcement of his severance pay entitlement. It therefore constitutes an abuse of his fiduciary duty if he refuses to give his consent to a draft resolution, even though his property interests are not affected. However, various measures affect the status of the company assets and thus the severance payment interest of the retired person, so that abuse is rather rarely acceptable.

On the other hand, the retired person also has to fulfill his corporate duties. For example, he will remain liable for any shortfall.

The payment claim directed against the GmbH is based move by move against assignment or consent to the collection of the share. Therefore, the company can demand the assignment to itself or to another only under the suspensive condition of payment of the severance payment from the free company assets or from third parties. In this respect, the severance payment claim is therefore ensured.

The retired person has no claim against the other shareholders if the severance payment is not paid. The reason for this is that the withdrawal from the company takes place solely on the initiative of the affected shareholder. This could thus unilaterally justify the liability of the co-shareholders.