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Evidencing to German Commercial Registers the Entitlement of the Directors of an English Limited to Represent that Limited

In Short


It is not sufficient, for purposes of evidencing to a commercial register of a German local court (a "Commercial Register") the entitlement of a director of an English private limited liability company (a "Limited") to represent that Limited, to provide to the Commercial Register a certificate issued by a German notary confirming such an entitlement, if the notary has obtained his / her knowledge merely and solely by examining the information available from the English Companies House (the "Companies House"). The reason is that the legal significance of this information is not comparable to that held by and available from a Commercial Register. According to the decision of the Higher Regional Court of Nuremberg (Oberlandesgericht Nürnberg) (the "OLG") on 26 January 2015 (case 12 W 46/15), this applies even if all of the directors listed in the records of the Companies House have jointly signed an application for registration to a Commercial Register. Instead, confirmation is required from an English notary, which confirmation shows what documents such notary has examined.

Background to the OLG Decision

The two directors of a Limited had granted written power of attorney to a third party to represent the Limited - being the sole shareholder of a German private limited liability company (Gesellschaft mit beschränkter Haftung) ("GmbH") - at a general meeting of shareholders of the GmbH, and to resolve the change of name of the GmbH. Together with the application for registration of the name change to the relevant Commercial Register, the German notary submitted to the Commercial Register a notarial certificate in which he stated that, based on an examination by him of the information held by the Companies House, the two directors (being the grantors of the power of attorney) were registered as joint directors and that their entitlement of representation continued to exist to the present day. The Commercial Register refused the registration of the name change, stating that the entitlement of representation of the two directors of the Limited had not been sufficiently evidenced.

The OLG Decision

The OLG Nuremberg confirmed the view of the Commercial Register, holding that Commercial Registers are required to verify the power of representation of the executive bodies of a legal entity at the time of the making of an application by that entity for registration to the Commercial Register. This verification requires positive proof of the entitlement of representation. Furnishing prima facie evidence (Glaubhaftmachung) is not sufficient.

In order to evidence the entitlement of the managing directors of a GmbH to represent that GmbH, the provision of a certified copy of a current Commercial Register extract (Handelsregisterauszug) is sufficient. Furthermore, pursuant to § 21 (1) of the German Bundesnotarordnung (BNotO), German notaries can issue certificates concerning the entitlement of representation of legal entities, if this is evident from an entry in the Commercial Register or a comparable register, and the notary has verified same by an examination of the register. With regard to a non-German entity, however, such a notarial certificate of a German notary is only sufficient, if the country of incorporation of the concerned foreign legal entity maintains a public register that is comparable to the Commercial Register. The Companies House is not comparable to the Commercial Register.

The OLG furthermore held that, in addition to the provision of a certificate issued by the registration authority (i.e. the English registrar of companies) or a 'certificate of good standing' together with a certified translation and an apostille, a certificate concerning a company management's entitlement of representation can also be issued by an English notary. In order to ascertain the entitlement of representation, an examination of the relevant company documentation is required. Such documentation includes the company's certificate of incorporation, its articles of association, and possibly a written power of attorney of the company's management, or a certificate demonstrating the management's resolutions, evidenced by way of copies made by the company secretary from the company's minute books.

Comment

There are currently miscellaneous differing court decisions interpreting the requirements of the Commercial Registers as regards evidencing the entitlement of representation of English Limiteds. Similar to the OLG Nuremberg, the OLG Schleswig (in its decision of 2 January 2012, case 2 W 10/12) and the OLG Düsseldorf (in its decision of 21 August 2014, case I-3 Wx 190/13) considered a certificate issued by an English notary sufficient evidence of the entitlement of representation of a Limited. Such a certificate is usually easily attainable. The notary may, however, not merely issue a formulaic statement of the entitlement of representation, but must explicitly mention the documents he / she has inspected (e.g. memorandum, articles of association, and minute book) as the basis for his / her findings.

Unlike the present case, some Commercial Registers do not require a notarial confirmation if all of the directors of a Limited, who are listed on the 'current appointments report' of the Companies House, sign a document. For if all of the directors of a Limited do so, the Limited would be effectively represented even in the event that the directors should have only joint power of representation. If a Limited only has one director or has a branch in Germany, the requirements for evidencing the entitlement of representation may, likewise, be lesser ones. Similarly, a translation into German of the required evidence is not insisted on in some cases if the responsible official at the Commercial Register has sufficient knowledge of the English language. Until these matters are definitively determined by the German Federal Court of Justice (Bundesgerichtshof), however, it is advisable that the requirements of each particular Commercial Register are ascertained from and discussed directly with that Commercial Register in each case.

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