July 15, 2024

Limited branch registration after Brexit |  Law

Limited branch registration after Brexit | Law

Whether a British company limited in Germany can, and under what conditions, have a branch entered into the commercial registry, is currently unclear after Brexit, if it is actually managed from Germany, and therefore has its administrative headquarters in Germany.

Background: The refusal to register a branch of a British limited company

a British Limited With Registered office in the United Kingdom He actually had a recording in 2014 a branch In the German commercial registry registered. The registration was denied by the registry court because the amount of the limited company’s share capital was not specified in the registry. In addition, the managing director and sole shareholder have not provided complete assurances that there are no circumstances preventing his appointment as general manager under the German GmbH Law. The insurance also lacked a statement that the director general who applied for entry had received instructions from a German notary, lawyer or consular officer regarding his obligation to provide the information to the registry court. So the insurance was incomplete and Did not comply with the regulations About the Registration Branches of foreign companies (Section 13g (2) HGB in conjunction with Division 8 (1) GmbHG).

After OLG Frankfurt rejected the complaint against the registry court complaints, the BGH had to rule on the legal complaint against him. With a decision of May 14, 2019, the Federal Court of Justice initially suspended the proceedings and submitted the question to the European Union Court of Justice (ECJ) in Luxembourg to decide whether union law excludes these requirements for entering the branch. In the commercial registry. At that time, the United Kingdom was still a member state of the European Union.

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BGH Resolution of February 16, 2021, Az. II ZB 25/17

The question before the European Court of Justice was settled with the UK’s withdrawal from the European Union. In its decision, the BGH stated (again) that the UK is now a third country for which EU law is no longer relevant.

So a UK limited company can object to the German court of registry no longer On The A corporate law directive has been set up in the European Union. Freedom of association, according to which companies from EU member states are equated with domestic companies, and the ban resulting from discrimination against foreign companies no longer applies.

According to the BGH, the current legal situation at the time of its decision on the due process complaint is crucial. It is therefore not important that the application for entry into the commercial registry was actually filed in 2014, when the United Kingdom was still a member state of the European Union.

BGH has not yet decided on this issue. The decision relates only to the annulment of the question referred to the European Court of Justice.

Note: The Brexit consequences of a limited company with a UK registered office

The interesting question remains for practically all companies with a legal seat in the United Kingdom and an administrative seat in Germany: Under what conditions can a German branch be currently registered with the Commercial Registry?

The answer to this question has yet to be decided by the BGH It depends on whether the seat theory will be applied to the UK as a third party or whether the enterprise theory will continue to be applied to the UK companies. distance Foundation theoryWhich, according to the case law in force of the European Court of Justice, must be applied to foreign companies in the European Union, a company established in a member state of the European Union under foreign law must be recognized in Germany. It should not be deprived of legal capacity because it does not meet national regulations (such as minimum corporate capital). The fact that the UK is now a third party and that companies based there can no longer count on freedom of incorporation speaks against applying the theory of incorporation to a limited company with its registered office in the UK. Alternatively, there are some arguments in favor of the Limited – like all other companies with a registered office in the third position – Seat theory Application. It follows from this that a limited company that is physically managed from Germany and, therefore, whose administrative headquarters is in Germany, is not granted legal personality in Germany.

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This is one Limited to one “partner” only Then it is One man’s work To qualify with personal liability of a “sole shareholder” / owner; If there are many “contributors” / They will be Limited Carriers German oHG Qualified with personal liability to their shareholders / owners. Then, branch registration will depend on the regulations applicable to the sole merchant / employer office. For this purpose, the branch should be a permanent business with its employees and material resources, which in principle can continue as an independent company. Branch business operations should be characterized by certain organizational independence for a part of the company. Thus it can be doubted whether this requirement exists, as there may not be any independent organizational branch of “oHG” or the sole proprietorship company, but this is identical to the administrative headquarters of the principal company.

Until these questions are decided upon by the BGH, legal uncertainty remains. Apart from this, here is a limited company with its administrative headquarters in Germany Options Available for Personal responsibility Shareholder in a company limited to Overflow:

  1. Administration Effective administrative seat In the United kingdom
  2. transition From the business operations of a UK capital firm to one German GmbH or UG (Limited liability)
  3. merger The company is a legal entity with limited liability

The appropriate design must be checked individually which avoids the problems related to the recognition of the branch and its entry into the commercial register on a case by case basis.

More news on this topic:

Brexit brings BRAO reform, which means Brexit deal LLPs

The law assists limited companies in setting up their administrative headquarters in Germany in the event of a Brexit

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Brexit and Limited