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Voting Rights of General Partners of an Asset Management Company - Company Law

Multiple voting rights laid out in the articles of association for the adoption of resolutions concerning changes thereto cannot be granted to the general partner of an asset management company.


Cologne, NRW -- (SBWIRE) -- 10/22/2013 -- GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Bremen, Dusseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London conclude: The Regional Court of Freiburg has determined in its judgment (12 0 133/12) that the general partner of an asset management company, who neither participates in the profit and loss of the company nor receives remuneration independent of profit, is not entitled to multiple voting rights as laid out in the articles of association in the event of a resolution to alter said articles. The Court thereby approved the claimant’s request. Certain provisions of the Stock Corporation Act, which enable multiple voting rights to be granted, cannot be applied to an asset management company. The fact that the company is physically structured does not conflict with this.

A particular feature of an asset management company is that several indeterminate partners participate. These do not exercise any influence on the articles of association of the already existent limited partnership; rather, their participation is oriented towards capital. This means that they neither import their personal interests into the wording of the articles, nor are they able to alter or remove existing passages therein. This ensures that when investors are presented with pre-written articles they can be sure that they won’t be disadvantaged. Additionally, those provisions in the articles which the general partners of the limited partnership favour without objective grounds are null and void.

The important principle of equal treatment protects minorities in company law and ensures that provisions which create an imbalance between the partners are ineffective. Unequal treatment due to special rights is thus only justified if the advantages gained are accompanied by an adequate risk. In the instant case, the defendant plead that it was exposed to the full economic risk as a general partner and the provision on multiple voting rights in the articles of association was therefore appropriate. However, the Court did not share this view and considered that the grant of multiple voting rights placed an inequitable disadvantage on the partners.

Company law is often a problem for the parties concerned. A lawyer versed in company law can settle questions that arise and highlight the available possibilities. It is especially important in cases of company resolutions to act quickly, as these must often be contested within the shortest timeframes.

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