Incorporating the corporation in Germany The presentation is

Incorporating the corporation in Germany The presentation is made by Belousov Nikita, Gegamova Alina, Kiseleva Olga, Nabokov Alexander, Sviridenko Alexey 07/06/2014, Faculty of law, HSE

What is it a “corporation”? 1. A body that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members. 2. Such a body created for purposes of government. Also called body corporate. 3. A group of people combined into or acting as one body. 4. Informal A protruding abdominal region; a potbelly.

A corporation in Germany Aktiengesellschaft (abbreviated AG) is a German word for a corporation that is limited by shares, i. e. , owned by shareholders, and may be traded on a stock market. The term is used in Germany, Austria, and Switzerland.

Legal basis In Germany and Austria, the legal basis of the AG is the German Aktiengesetz –Stock Corporation Act as of 6 September 1965 (BGBl. I p. 1089) FNA 4121 -1 Last amended by article six of the German Restructuring Act (Restrukturierungsgesetz) dated 9 December 2010 (BGBl. I p. 1900).

Requirements for establishing a corporation in Germany There is no minimum number of shareholders. The formation of a oneshareholder "AG" in Germany is also possible. Domestic as well as foreign persons or legal entities can act as founders, as can partnerships. At the formation the capital of the "AG" in Germany amounts to a minimum of € 50, 000. Deposits may be made in the form of cash or contribution in kind. By virtue of the law, every "AG" in Germany is a Trading Company, irrespective of the purpose of the company. For a formation any purpose may be pursued, provided that it is legally admissible. For the formation the name of the "AG" in Germany can on principle be chosen freely. The principle of truth of the name has to be taken into consideration; any risk of confusion with other companies has to be excluded.

Stages of the incorporation: In general, the following steps have to be taken for the formation / incorporation of a "AG" in Germany: preparation of the statutes (articles of association) provision of the share capital appointment of the executive bodies payment of part of the capital submission of the formation report formation auditor application and entry into the commercial register (German or English)

Preparation of the statutes The statutes of the "AG" in Germany (articles of association) have to be certified by a public notary. However at the formation, the public limited company is established only upon entry in the commercial register. The incorporation statutes of the "AG" have to comprise the following information: name of the company registered office purpose of the company amount of the share capital nominal value of the shares number of shares as well as designation as “ordinary shares” or “preference shares” type of issue (bearer or registered shares) number of members of the board of directors form of notification

In case of qualified formation / incorporation (formation with special agreements regarding specific financial risks), further provisions have to be included in the statutes (special benefits for individual shareholders or third parties, formation expenses, contributions in kind, acquisition of assets etc. ). The founders of the "AG" in Germany have to provide proof of identity upon notarisation (identity card or authorisation with apostil or excerpt from the commercial register). The articles of formation / incorporation of the "AG" have to indicate the founders, the nominal value, the issued value and the type of the shares of each founder as well as the paid amount of the formation capital The registered office of the "AG" has to be located in Germany. However, the actual administration of the company may take place elsewhere (in the country or abroad). The purpose of the "AG" in Germany has to be stated in detail.

Share capital The share capital shall be denominated in Euro Shares may be established either as par or as non-par For the formation the minimum nominal value is € 1. 00 Shares shall not be divisible

Classes of shares Shares may confer different rights, in particular with regard to the distribution of profits and assets Bearer shares vs. registered shares Ordinary shares vs. preference shares

Appoitment 1) The founders appoint the first supervisory board and the external auditors 2) The supervisory board appoints the first management board

Registration 1. Filing application to the court 2. Examination by the court 3. Registration in the commercial register

Documents 1. 2. 3. 4. 5. 6. 7. signed names of the members of the board of directors declaration and proof of payment of the capital calculation of the formation expenses formation protocol and statutes protocol of the appointment of the board of directors and the supervisory board formation report and audit report by the board of directors and the supervisory board as well as the formation auditors authorisation certificate (if a state authorisation is required)

Thank you for your attention.