In addition, the managing directors must issue a declaration to confirm that they are not prohibited from practising certain professions which are either wholly or partly identical in nature to the business purpose of the GmbH, and that they have not been sentenced either in Germany or abroad under, inter alia, certain provisions of the German Criminal Code, the German Commercial Code and the German Law Regulating the Transformation of Companies.52 The managing directors must also confirm that they have been instructed by the court, a domestic or foreign notary, a person practising a similar legal profession or a consular clerk as to their unlimited disclosure obligation towards the court. Such instruction may also be given in written form.53
Finally, the managing directors must indicate the form of their power of representation in the application letter, for example, joint or individual, and any exemptions from section 181 of the German Civil Code,54 which allows contracts between the managing director him- or herself and the GmbH or between the GmbH and other companies represented by the managing director (self-contracting).
32. Registration and publication
Once all of these documents have been filed, the court responsible for the respective commercial register assesses whether all the requirements for establishing a GmbH have been fulfilled. If the company has not been properly established or the registration has been incorrectly filed, the court may refuse to register the GmbH.55 This applies in particular if the contributions in kind have been ‘significantly’ overvalued. In such a case, however, the court may order that the respective shareholder must match the missing share capital by means of a payment in cash.56 Typically, the court will notify the filing notary if it believes that the application contains certain errors or the company formation is incorrect in order to give the notary and the shareholders the opportunity to amend the mistakes.
Once all of the documents have been filed correctly, the GmbH is then registered with the commercial register. When registering the company, the court publishes the trade name and the place of business of the company, the purpose of the company, the registered share capital, the day upon which articles of association were signed and the names of the managing directors in the commercial register.57 Additionally, the powers of representation of the managing directors are also published in the commercial register.
Since the Act to Modernise the Law Governing GmbHs and Combat Abuses came into force, it has also been a requirement that the domestic business address under which documents or other notices may be served to the company is published in the commercial register.58 If the company has also nominated a person who is entitled to receive declarations of will and documents served upon the company in the company’s name, these details must also be published.59 Such persons are typically legal or tax advisers, and as long as they are registered with the commercial register, they are deemed to be authorised to receive declarations of will and other documents on behalf of the company. The publication of these addresses facilitates communication with the GmbH and it is more difficult for managing directors to avoid receiving documents on behalf of the GmbH. Moreover, if the company cannot be reached under its registered address, under the address of the third party or under any other known domestic address, declarations of will and other documents may be served via public notification (öffentliche Zustellung).60 In addition, if the GmbH has no managing director, either in factual or in legal terms (Führungslosigkeit), declarations of will and documents may also be served upon the shareholders of the company.61 Therefore, the possibility of ‘burying’ a GmbH by avoiding the service of declarations of will and other documents is significantly reduced.
In addition, the information to be registered as outlined above must also be published in the electronic information and communication system prescribed by the administration of justice department for the respective state (Landesjustizverwaltung). The publication may thus be effected in different ways depending on the state in which the company is registered. Typically, the information is published under www.handelsregisterbekanntmachungen.de, or in the electronic federal gazette (elektronischer Bundesanzeiger; www.bundesanzeiger.de).
33. Legal consequences of registration
Upon registration, the GmbH is fully established as separate legal entity.62 Any rights and obligations created by the Vor-GmbH are transferred automatically by law to the fully established GmbH.
E. Unternehmergesellschaft (haftungsbeschränkt)
34. General
When the Act to Modernise the Law Governing GmbHs and Combat Abuses was enforced, a second type of GmbH was created which is referred to as an ‘Unternehmergesellschaft (haftungsbeschränkt)’ or ‘UG (haftungsbeschränkt)’. The characterising feature of the Unternehmergesellschaft is that its registered share capital is lower than €25,000.63 It may even be as low as just €1.00.64 The name of the company must contain the words ‘Unternehmergesellschaft (haftungsbeschränkt)’ or ‘UG (haftungsbeschränkt)’,65 by which means it should be clearly distinguishable from an ‘ordinary’ GmbH, which has a minimum share capital of €25,000.
The Unternehmergesellschaft may only be established by way of a contribution in cash, and not by contributions in kind.66 The contribution must be paid in full prior to the filing of the company for registration.67
The Federal Supreme Court has confirmed the prohibition of contributions in kind by stating that the formation of an Unternehmergesellschaft by way of the company being split off from an existing entity pursuant to section 123, paragraph 2, no. 2 of the German Law Regulating the Transformation of Companies is not permissible.68 In another decision of the same year,69 the court ruled, however, that the prohibition of contributions in kind for an Unternehmergesellschaft should not apply to situations in which the share capital of the company is increased by a contribution in kind which results in a share capital for the company of €25,000 or more, that is, the minimum share capital of a (regular) GmbH. By these means, the Unternehmergesellschaft would then fulfil the criteria of a regular GmbH upon the registration of the capital increase. The court argued that otherwise the founders of a Unternehmergesellschaft would be discriminated against in comparison with the founders of a regular GmbH, where a contribution in kind is possible at any time. However, a capital increase in the case of the Unternehmergesellschaft