Requirements for Demonstrating the Entitlement to Represent an English Limited Liability Company

The representatives of an English limited liability company can demonstrate their entitlement to represent a company in dealings with German authorities by providing a certificate from an English notary. This certificate must indicate the grounds on which the notary made his determinations. This was recently held by the Higher Regional Court of Nuremberg.

Background

If a company authorizes an entry or the deletion of a right in the German land register, the entitlement of representation of the person acting on behalf of the company must be demonstrated to the land registry office by means of public records or notarially certified documents pursuant to § 29, para. 1, sent. 1 of the German Land Register Act (Grundbuchordnung; GBO). German companies can fulfill this requirement simply by presenting an extract from the relevant German commercial register, as same shows not only which persons are authorized to represent a company, but also whether these persons are authorized to do so solely, or only jointly with another person.

The situation with English limited liability companies is different. In the United Kingdom, as in many other common law jurisdictions, there are no comparable register extracts. While the "Current Appointments Report" available from the English companies house shows which persons are authorized to represent a company, it does not show whether each person is authorized to do so solely or whether he / she must act jointly with another person.

The same problem arises with respect to incorporations of companies or shareholders' resolutions that are to be filed with a German commercial register. The German commercial register usually requires proof of a person's entitlement to represent the company. But how can this evidence be provided, if a commercial register extract showing this information does not exist?

The Decision

The above question was answered by the Higher Regional Court of Nuremberg in its decision of 25 March 2014 (Case 15 W 381/14) in relation to the representation of a company in dealings with the German land registry.
The court held that the director of an English limited liability company can prove his or her authority to represent a company by way of a certificate from an English notary that confirms the existence of the company and the entitlement of representation, based upon inspection of the English commercial register and the documents available from same (memorandum, articles of association and minute book). The certificate must contain information about the actual basis of the determination(s) made.

Comments

The decision shows that an English limited liability company can demonstrate who has authority to represent it relatively easily, given that a notarial certificate can usually be obtained without too much effort. However, the English notary may not merely recite his findings, but must explicitly state the basis of his determination. This means that, at a minimum, he must identify the documents he reviewed; he cannot simply state that he inspected the English commercial register.
This decision is consistent with the ruling of the Higher Regional Court of Schleswig of 1 February 2012 (Case 2 W 10/12), regarding proof of the entitlement to represent an English limited liability company in dealings with German commercial registers. However, until the issue is decided by the German Supreme Court (Bundesgerichtshof), we recommend that applicants should confirm with the German land registry or the relevant commercial register precisely what documents they require to be submitted. Some commercial registers do not require a notary's confirmation if all the directors listed in the register extract sign the relevant document, given that in these circumstances, the company would be effectively represented even if there is a requirement that the directors must sign jointly.