• BGH: Interest in bringing proceedings to challenge the election of the supervisory board
  • March 19, 2013 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Cologne Office
  • In its judgment of 19 February 2013 (Az.: II ZR 56/12), the Federal Court of Justice (BGH) commented on the interest in bringing proceedings to challenge the election of a supervisory board.

    GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Hanover, Bremen, Nuremberg, Essen and London www.grprainer.com/en  explain: It emerged from the judgment that an interest in bringing proceedings against an election of the supervisory board of a stock corporation possibly does not lapse in the event of the supervisory board resigning. On the contrary, such an interest ought only to be absent if an election challenge has been brought.

    Several supervisory board members were elected at the general meeting of shareholders, who thereafter resigned their posts. Subsequently, the claimant apparently filed for the election of the supervisory board to be declared invalid.

    The BGH ruled that an interest in bringing legal proceedings for an action after the resignation of the supervisory boards can only lapse if an admissible challenge to an election exists. Additionally, the Court clarified that the claimant has no insight into the activities in the supervisory board. For this reason, it is the role of the stock corporation to give a summary of the supervisory board meetings and the voting rights when votes take place. Only then can it rely on the lapse of the interest in bringing proceedings to challenge the election.

    The share capital of the company is divided into multiple shares. As the owners of the shares, the shareholders are the owners of the AG. An AG is responsible for its liabilities with its company assets. Its shareholders are not therefore personally liable for the AG’s liabilities. Nonetheless, they run the risk of depreciation in the value of their shares.

    Since an AG is to be strictly orientated according to the wording of the law in the AktG and only limited deviations from it are allowed, it is important to obtain prior legal advice.

    A lawyer versed in company law can comprehensively advise you with respect to the possibilities and risks of a stock corporation. In this way, any problems can potentially be avoided in advance.