By the Decision of 27.09.2011 (Case No.: II ZR 279/09) the Federal Court of Germany expressed its point of view regarding the interpretation of compensation clauses in the memorandum of association of a GmbH (limited liability company).

North Rhine-Westphalia, Germany -- (SBWire) -- 12/19/2012 --GRP Rainer lawyers and tax advisors in Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London http://www.grprainer.com/en conclude: Interpretation of compensation clauses for a shareholder withdrawing from a limited liability company should assume that the shareholders having doubts about the compensation clauses in the memorandum of association pursue such a compensation for the shareholders withdrawing from the company that will treat them equally and settle the matters for a long term.

The interpretation of compensation clauses should be based on objective factors. The right of a shareholder for a compensation payment in case of his/her withdrawal from the company belongs to the basic rights of shareholders. The right for compensation concerns both present and future shareholders, and belongs to the principles of corporate law.

Based on objective factors it should be assumed that compensation clauses are supposed to deal with doubts regarding the equal treatment of all shareholders. Regardless of the time of the shareholders withdrawal they should be compensated based on the principle of equality. Compensation clauses should then be interpreted as providing such a calculation of compensation that will settle the matters for a long term and will treat the shareholders equally.

A limited liability company offers its shareholders diverse possibilities of building relations within the company, which also provides space for manoeuvres at the conclusion of the memorandum of association. An attorney specializing in the corporate law can help create efficient compensation clauses in your company’s memorandum of association that will treat the shareholders equally, as well as in the interpretation of existing compensation rules. A corporate law attorney will provide you tailored and comprehensive advice.

An experienced lawyer can help you establish a limited liability company, to draft a memorandum of association, as well as compensation provisions for a memorandum of association in case of a change in ownership or a withdrawal of a shareholder from the company with respective compensation, and - if necessary – in case of the company’s dissolution.

About GRP Rainer
GRP Rainer LLP http://www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, and Stuttgart, Germany and London UK.

Contact Michael Rainer
Lawyer, Managing Partner

GRP Rainer LLP
Hohenzollernring 21-23
50672 Cologne
Germany

Phone: +49 221-27 22 75-0
info@grprainer.com
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