Board member of stock corporation and managing director at a subsidiary
A member of the board of executive directors at a German stock corporation (AG) cannot simply appoint themselves to the position of managing director at a wholly owned subsidiary, no questions asked. That was the verdict of Germany’s highest civil court, the Bundesgerichtshof (BGH) (case ref.: II ZB 6/22). It is necessary when creating structures […]
Reporting obligations for M&A transactions
Failure to comply with the reporting obligations for foreign trade and payments in connection with M&A transactions may be treated as a summary offense and punished with heavy fines. Fortunately, it is possible to avoid this outcome. With the initial focus on other issues – such as assets, existing contracts and commitments, or risks – […]
BGH says no obligation to pay negative interest
Germany’s highest civil court – the Bundesgerichtshof (BGH) – recently ruled in a case from May 9, 2023, that lenders are not obligated to pay negative interest in connection with variable rate loans (case ref.: XI ZR 544/21). It is commonplace for bank customers to receive interest from their bank on positive account balances, and […]
German Whistleblower Protection Act set to enter into force
Germany’s lower and upper houses of parliament – the Bundestag and Bundesrat – have passed a law designed to strengthen protections for whistleblowers. The legislation is expected to come into effect in June of this year. Its adoption marks the transposition into German law of EU Directive 2019/1937 on the protection of persons who report […]
Fraud and white-collar crime
Fraud lies at the heart of many white-collar crimes. But in order for conduct to amount to fraud, various elements of the offense need to be present. The impact of allegations of fraud is immediate and profound. Board members, managing directors, and other company officers who find themselves on the receiving end of such accusations […]
BAG weighs in on deadline for summary dismissal amidst compliance investigations
Germany’s Federal Labor Court – the Bundesarbeitsgericht (BAG) – has stated that an employer is still entitled, subject to certain conditions, to issue an employee with a summary dismissal notice even after the two-week deadline has passed. The country’s labor laws require the employer – or an authorized person within the company – to give […]
Best Lawyers 2024 – MTR Legal Rechtsanwälte and Marc Klaas among Germany’s best
U.S. publishing house Best Lawyers has once again recognized commercial law firm MTR Legal Rechtsanwälte and the firm’s very own Marc Klaas in its latest annual list of The Best Lawyers in Germany. 2024 marks the 15th edition of the awards, an event that MTR Legal Rechtsanwälte and Marc Klaas are no strangers to. And […]
Marc Klaas of MTR Legal Rechtsanwälte honored again in 2023
In its ranking for this year’s best M&A lawyers, Handelsblatt has once again singled out Marc Klaas at MTR Legal Rechtsanwälte for recognition. The German business newspaper regularly collaborates with the renowned U.S. publishing company Best Lawyers with the aim of identifying Germany’s top lawyers and law firms. Not for the first time, Marc Klaas […]
Draft law presented establishing commercial courts
Germany’s Federal Ministry of Justice presented a bill on April 25, 2023, that establishes new commercial courts with the aim of strengthening the country’s judicial system. Germany is an important hub for business in a world where many businesses operate internationally and where legal disputes among international business partners are par for the course, not […]
Voluntary disclosure – Tax authorities have cryptocurrencies in their sights
The German tax authorities are taking aim at investors who have traded cryptocurrencies. Those who have not paid the tax due on the profits may still be able to submit a voluntary declaration for tax evasion. Investors with undeclared profits from trading cryptocurrencies such as Bitcoin and Ethereum are risking trouble with the tax authorities, […]
“Caramel” product containing only caramel flavoring in breach of competition law
A product labeled as caramel pudding must in fact contain caramel. Flavoring agents won’t cut it, says Munich’s regional court, the Landgericht (LG) München (case ref.: 33 O 13261/21). If something appears on the outer packaging, it should also be present in the product itself. The absence of a named substance is a violation of […]
Voluntary disclosure to avoid a conviction for tax evasion
Reporting oneself to the tax authorities over inaccurate or incomplete tax returns continues to be a path for tax dodgers to return to a state of compliance. But in order for the voluntary declaration to actually lead to immunity from punishment, a number of conditions have to be met. One of the outstanding features of […]
Tax relief when outsourcing a sole proprietorship
Tax relief can be claimed in the event of a sole proprietorship being outsourced to a newly formed corporation. That was the verdict of Münster’s tax court – the Finanzgericht (FG) Münster – in a ruling from May 3, 2022 (case ref.: 8 V 246/22 GrE). Section 6(a) of the German Real Estate Transfer Tax […]
BGH delivers ruling on estimates in criminal proceedings for tax offenses
In a judgment from February 10, 2022, Germany’s highest civil court – the Bundesgerichtshof (BGH) – held that while the amount of taxes evaded can be estimated in criminal proceedings for tax offenses, not every method for estimating them is always appropriate (case ref.: 1 StR 484/21). While it is indeed true that, in the […]
OLG Frankfurt opines on the validity of an arbitration ruling
Frankfurt’s higher regional court recently ruled that an award or finding of an arbitration tribunal is invalid if it is not signed by all the arbitrators and no adequate explanation in the form of a note or statement is provided (case ref.: 26 Sch 14/22). Arbitration offers a number of potential advantages over judicial proceedings, […]
BFH says no tax deduction for final losses of foreign branches
In a judgment from February 22, 2023, Germany’s highest tax court – the Bundesfinanzhof (BFH) – ruled that German companies may not be able to offset losses incurred by a branch office in another EU country against profits generated in Germany as a means of reducing their tax burden. Under international tax law, domestic companies […]
Unintended consequences of renouncing an inheritance
A ruling by Germany’s highest civil court – the Bundesgerichtshof (BGH) – from March 22, 2023, illustrates the potential for unintended consequences from renouncing an inheritance (case ref.: IV ZB 12/22). Crucially, these consequences could have been avoided by preparing a will. Testators should plan carefully for the transfer of their assets and not relinquish […]
German tax court rules estate tax does not apply to foreign legacies
Estate tax may not be due on foreign legacies. That was the verdict of Germany’s highest tax court – the Bundesfinanzhof (BFH) – in a judgment from November 23, 2022 (case ref.: II R 37/19). It is generally the case that real estate passed on by inheritance is subject to estate tax. But according to […]
Keyword advertising featuring third-party trademarks
In a judgment dated February 9, 2023, the Higher Regional Court (OLG) of Braunschweig held that the use of a third party’s trademark in keyword advertising may be permissible (case ref.: 2 U 1/22). A lot of online advertising today comes in the form of what is known as keyword advertising. This is where an […]
Pros and cons of M&A share deals
A share deal may be the best option for acquiring a business if the intention is to acquire the business as a whole as opposed to simply individual assets, as is the case with an asset deal. Experts are expecting the number of M&A transactions to rise again, particularly in the second half of 2023. […]
