Termination : chapter 12

• Date: 01 January 2008
• Pages: 185-198
• Author: Christoph Jaehne
• Published date: 01 January 2008
• DOI: 10.10520/EJC74083

185

CHAPTER 12

TERMINATION

12.1 Introduction

There are different ways through which an entity may be ter minated.

Invalidity, dissolution, liquida tion, insol vency pro ceedings and com-

position are each the result of cer tain devel opments. Specif‌ic provi-

sions deal with these developments. Both entities being juristic per-

sons, it will be interesting to see if the procedures are similar.

12.2 GmbH

12.2.1 Invalidity

Due to specif‌ic defects of its articles relating to its share capital or

its purpose, a company may be declared in valid. The com pany may

be declared invalid by the court upon an action brought by a share-

holder, a managing direc tor or a member of the supervisory board.1

As soon as the invalidity declared by the court has been regis tered

in the commercial register, the pro visions relating to the dis so lution

also apply to the winding-up of the com pany de clared invalid.2 How-

ever, this does not affect the va lidity of transactions made with third

par ties by the com pany.3 According to §77 (3) GmbHG, the share-

holders are also ob liged to make the contributions promi sed as far

as re quired to discharge the company’s liabi lities.

12.2.2 Dissolution

A GmbH is dissolved in the following circumstances:4

expiration of the period stated in the articles;• 5

resolution by the members with a majority of three-quarters of •

the votes cast;6

by court order upon an action brought by members owning at •

least ten per cent of the shares asking for a dis solution due to

an important cause;7

1 §§75-77 GmbHG, dealing with the ‘Nichtigkeitsklage’ (action for annul-

ment) brought by any of the GmbH’s organs; see, however, regarding

their minimal practical relevance, Lutter-Hommelhoff, GmbHG §75, note 1.

2 §77 (1) GmbHG.

3 §77 (2) GmbHG.

4 Additional circumstances can be stated in the association agreement,

§60 (2) GmbHG.

5 §60 (1) no. 1 GmbHG.

6 §60 (1) no. 2 GmbHG, the members may change the required votes cast

in the articles.

7 §60 (1) no. 3; §61 (2) GmbHG, see §61 (1) giving the catch-all clause.