Germany Update: The GmbH is online!

The German Act on the Implementation of the Digitisation Directive (DiRUG) has been in force since 1 August 2022. Shortly before the Entry into force of the DiRUG, the traffic light government had also made further improvements with the act supplementing the regulations for the implementation of the Digitization Directive (DiREG); some of the changes introduced by DiREG also came into force on 1 August 2022.

Fundamental innovations apply:

Online Foundation

The cash formation of a GmbH is now also possible online. For this purpose, the Notarization Act in particular was amended in order to create the legal framework for notarial certification via video communication. Participants must identify themselves by means of an electronically transmitted photo and a qualified electronic proof of identity of an EU or EEA country, e.g. with a German identity card with eID function. The transcript of the notary, which must also be drawn up electronically, must be provided with qualified electronic signatures.

Furthermore, it is now possible to carry out the public certification of qualified electronic signatures via video communication, e.g. for commercial register applications. Certification by means of video communication was originally intended only for sole traders and corporations, but has since been comprehensively designed by DiREG. According to the DiREG, online register registrations are already permitted for the cooperative and partnership register, but only from 1 August 2023 for the register of associations.

The power of attorney to found a GmbH can already be certified according to the DiREG by video communication. It is also possible to submit a list of shareholders with a qualified electronic signature.

After the changes by the DiREG, the online GmbH foundation will finally be possible from 1 August 2023 for non-cash and mixed cash and non-cash foundations. The online notarization procedure will also be opened for unanimous resolutions to amend the Articles of Association and for capital measures at the GmbH. Even in 2023, it is still not possible to set up a company online with the contribution of objects, the transfer of which in turn requires a notarial (presence) notarization, e.g. the foundation with the contribution of GmbH shares or real estate.

Free retrievals from the commercial register

There are no longer any fees for retrieving information and documents from the commercial register, and the same applies to calls from the register of associations, partnerships and cooperatives. The costs of providing these data and documents are to be compensated by charging a provision fee to the registered legal entities.

Online publication of commercial register information

A separate publication of information to be submitted to the commercial register in an Official Journal or on another portal is no longer required. It is sufficient that the entry in the commercial register is available online for the first time. It shall then be deemed to have been published at the end of the date of registration.

In future, the submission of accounting documents and company reports, such as annual financial statements, for disclosure will only be made to the business register as a central platform for making company data accessible, and no longer to the Federal Gazette. Documents are also only retrieved via the business register.

Cross-border exchange of information on branches

Information on foreign branches of a domestic corporation that are subject to the law of another member state of the EU or an EEA state must now also be entered in the commercial register, including with regard to their establishment or termination, their company name, their registered office, the business address, etc.

Facilitations have also been introduced for the registration and registration of branches of an EU or EEA corporation in Germany, e.g. also with regard to the possibility of online certification of the register application.

Cross-border exchange of information on disqualified managing directors

In addition, the cross-border exchange of information with regard to disqualified managing directors has been expanded. According to German law, a managing director must assure the registry court that he has not been convicted in the past five years at home and abroad for a criminal offence referred to in § 6 sec. 2 sentence 2 no. 2 and 3 GmbHG. The same applies to the management board of an AG. The business register is intended to answer foreign inquiries and forward requests for information from German courts to the competent foreign authorities. From a German point of view, the subject of the exchange of information is in particular information from the Federal Central Register or the Central Trade Register, which may then lead to the disqualification of the managing director in the relevant EU or EEA member state.

In addition, from 1 January 2023, professional and commercial bans issued abroad will also lead to the disqualification of managing directors or board members of German companies (§ 6 para. 2 sentence 3 GmbHG or § 76 para. 3 sentence 3 AktG in conjunction with § 11 EGGmbHG and § 26m EG-AktG).

Result

It is, of course, timely and to be welcomed that the procedure for founding a company and the commercial register procedure are also being further modernised and digitised. In particular, the expansion of the DiRUG by the DiREG has significantly advanced the digitization of corporate law in Germany. Numerous possibilities are opened up, which are certainly suitable for significantly facilitating the incorporation procedure or the decision-making process for GmbH shareholders. For example, mixed online and face-to-face certifications should also be possible, which can, for example, save a shareholder based abroad the journey. How the procedures will prove themselves in practice remains to be seen. Many stakeholders may not yet have the required eID and electronic identification and signature equipment. DiRUG and DiREG also hold on to the notary’s area of office for online notarizations, i.e. the notary may only carry out the notarization online if there is a connection to his area of office, such as the company to be founded takes its seat in the office of the notary (§ 10a para. 3 BNotO), which seems a bit out of time.

Whether the hoped-for acceleration effect actually occurs in the start-up procedure seems doubtful, at least in the case of foundations by foreign companies. For them, the online notarization procedure is particularly interesting. In practice, however, the formation of a GmbH is often delayed by the lengthy process of opening a bank account in Germany or as a result of the proof of the founding company, such as foreign company documents, which must still be submitted to the register court, certified and provided with apostille or legalized, etc. Even a notarized and legalized power of attorney from abroad must still be submitted to the notary notary in original or in copy. Founders from third countries, e.g. from the U.S.A. or Great Britain, cannot use the online procedure due to a lack of the necessary identification options.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.