Fellow shareholders are personally liable in the case of a (forced) redemption of GmbH shares when they have triggered the prerequisites under §§ 34 para. 3, 30 para. 1 German Act on Companies with Limited Liability [Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"] or an insolvency situation or have otherwise thwarted the claim for compensation in violation of good faith.

Facts

An exiting shareholder in a GmbH asserted claims against the remaining shareholders as jointly and severally liable obligors for personal liability for the still outstanding claim for compensation when the GmbH refused payment on the basis of §§ 34 para. 3, 30 para. 1 GmbHG and insolvency proceedings were subsequently opened over the assets of the GmbH.

The decision

The Federal Supreme Court of Justice [Bundesgerichtshof, "BGH"] has now clarified that simply the incapacity of the company to pay is not sufficient to establish liability of the other shareholders. The fellow shareholders are only personally liable if they continue the company while not taking steps to satisfy the compensation claim and accordingly thwart the disbursement in violation of good faith. The court finds that there is a violation of good faith if the shareholders trigger the elements under §§ 34 para. 3, 30 para. 1 GmbHG (prohibition on paying out stated capital) or an insolvency situation in violation of good faith or if they otherwise thwart (complete) fulfillment of the exiting shareholder's claim for compensation. The shareholders can make provisions in the articles of association or in an agreement under the law of obligations with regard to liability in the case of non-payment that go as far as permitted under "good morals" when excluding compensation.

Relevance for legal practice

The BGH held in the judgment dated 24 January 2012 (BGHZ 192, 236 = NZG 2012, 259) without any further explanation that there can be a proportionate obligation to pay on the part of the remaining shareholders to the exiting shareholder. This is a further refinement in the case law of the BGH on liability of shareholders in the case of a failure to pay compensation, and the BGH has further specified the elements of the claim by requiring, in addition to the deterioration of the company's economic situation, conduct on the part of the shareholders constituting a violation of good faith. Therefore, shareholders are well advised to include provisions in the articles of association or a shareholders' agreement (concluded on the occasion of the exit) which limit liability for a failure of the company to pay compensation to an exiting shareholder within the limits permitted by good faith.

(BGH, judgment dated 10 May 2016 – II ZR 342/14)

Ansgar Hain, Attorney-at-law
Berlin

Svetlana Charushnikova, Attorney-at-law
Berlin