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Termination of a GmbH: It is not always necessary to await the expiry of a blocking year

When liquidating a German limited liability company (GmbH) it is necessary to await the expiry of a blocking year before deleting the GmbH from the commercial register. However, there are exceptions to this rule.

The termination of a GmbH is in principle carried out in three stages: dissolution (by resolution of the shareholders), liquidation and deletion from the commercial register. The dissolution of the company terminates the commercial activity. The company is then liquidated by the liquidator with the purpose of distributing the remaining assets to the shareholders. Only after deletion from the commercial register, the company no longer exists legally. As a rule, there must be a full year between the dissolution and deletion, the so-called "blocking year". In principle, no assets may be distributed to the shareholders during this year, because it is intended to give all creditors of the company - even those who are unknown to date - the opportunity to file and enforce their claims. As a provision to protect creditors, the blocking year cannot be shortened by the articles of association. However, if the company is penniless, the one-year blocking period does not  fulfill its intended purpose and only imposes a burden on the shareholders. As an exception, the deletion of the company can in this case be registered immediately, without waiting for the expiry of the blocking year. The Higher Regional Court of Hamm ruled accordingly in a decision of 2 September 2016 (27 W 63/16). It is crucial that the liquidator, when registering for deletion, provides a comprehensive statement of the Company's pecuniary condition and presents the actual circumstances. In particular, the liquidator must state that the company has no assets, no capital contributions on shares of the Company are outstanding, no claims of third parties including the tax authorities exist, no lawsuits where the Company is involved are pending and no case of insolvency has occurred. The Register Court, when deciding on the deletion, may assume that the duly declared facts are accurate. Only in case of well-founded doubts it has the right and the obligation to further examination. The outcome of a taxation proceeding does not have to be awaited if the company has finally discontinued its business operations and no longer has any assets.

The respective practice of the competent Register Court should be taken into account in each individual case. Then it is possible to wind up and delete a penniless GmbH quickly.

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