GRP Rainer LLP

The Ltd. Firm Can Be Answerable for a Small Business with Similar Identity

Ltd. companies can be accountable for bad investment guidance through a business with a similar name.


North Rhine-Westphalia, Germany -- (SBWIRE) -- 12/31/2012 -- GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Hamburg, Munich, Stuttgart, Frankfurt and London explain: The German Federal court of justice (Bundesgerichtshof - judgment from 05.07.12 - II ZR 116/11) ruled on the preconditions of the company's continued responsibility based on § 25 of the German commercial code (HGB). Ltd's sharing the same name as a personal corporation might be answerable for poor investment recommendations.

The company activities are substantial for identifying a company's continued responsibility. § 25 HGB lays out the actual liability of the consumer. It'll keep correct, if the old firm is abandoned and a brand new one is started, though the organizations continue being fundamentally identical within name, as well as, in their particular activities. If one of these businesses displays a continual business traffic to a third party, then the firm becomes accountable for the transactions from the previous firm.

Within the previously mentioned situation, the clientele had the impression that they were dealing with one and the same company. Hence, the inclusion of the “GmbH” label has not been regarded. These criteria will likely be utilized for the determination of the legal responsibilities for that GmbH, to check if an interconnection exists between it and the previous business. Considering this, the new business is liable for the actions of the old organization in accordance with § 25 HGB. If the § 25 HGB is not suitable then it is nonetheless realistic for the business to be held accountable. The GmbH must consider the claims of the opposition to be valid, in case it appears to act just like the old company. In cases like this, a law of legal responsibility can be applied. The prerequisites are similar to § 25 HGB in this circumstance.

If you've been affected by undesirable investment counseling, then speak to a skilled business lawyer. A lawyer proficient in the area will check just what claims you happen to be eligible for, and also versus whom they could be made. In addition, a lawyer can help you make the right choices for the future.

GRP Rainer LLP 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.

Michael Rainer
Lawyer, Managing Partner

GRP Rainer LLP
Hohenzollernring 21-23
50672 Cologne

Phone: +49 221-27 22 75-0