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Retention requirements after liquidation

In the event of liquidation, the books and records of a GmbH (German limited liability company) must be kept for at least 10 years after completion of the liquidation. These can also be stored electronically, provided this is consistent with the principles of proper bookkeeping.

The decision of the Celle Higher Regional Court of January 22, 2018, Case No.: 9 W 8/18

After completion of a liquidation, a creditor was authorized by the Registration Court to inspect the books and records of the liquidated GmbH pursuant to Section 74 (3) of the Law on Limited Liability Companies - GmbHG. The liquidator who was keeping the books and records lodged an appeal against this. The Celle Higher Regional Court held the appeal as inadmissible for lack of a sufficient amount in controversy. In addition, it also ruled that the appeal was unfounded. A restriction of the right of inspection due to special circumstances is not apparent, nor is the objection that the books and records are not in physical form but only in electronic form legally significant.

Comment

The decision addresses issues that are relevant in the practice. For how long and in what form must a company's documents and records be kept after its liquidation? And who has the right to inspect these documents? For a GmbH, this is regulated by Section 74 (2) and (3) GmbHG.

According to this provision, all books and records – including those concerning the liquidation – must be kept. They may also be held in electronic form, provided that this complies with the principles of proper accounting. This is for instance not an option for opening balance sheets or annual and consolidated financial statements.

In addition, these documents and records must be kept for 10 years, starting with the handover thereof to the person tasked with their safekeeping. This can either be a shareholder or a third party. Furthermore, in the event of a supplementary liquidation, the 10-year period is started anew. In addition, Section 257 of the German Commercial Code – HGB must be observed in determining the deadline: unless the deadline pursuant to Section 257 HGB has already expired for certain documents at the time of liquidation, the longer deadline shall apply. These documents need then not be kept in accordance with Section 74 (2) HGB.

Shareholders are in principle entitled to inspect the stored records and books; creditors may be authorized to do so by the competent court for the liquidated GmbH. To this end, a creditor must make his creditors’ right and his legal interest in the inspection credible. The court must then undertake a balance of interests. It should for example be taken into account whether the inspection would case the personal rights of third parties to be impaired. The Celle Higher Regional Court did not see such grounds for refusal of the right of inspection in the decided case.

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