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Cancellation due to lack of funds and residual assets

The (re-)registration of a company deleted due to lack of funds and of the supplementary liquidator in the commercial register may be omitted if the now still required liquidation of the discovered residual assets are of a minor extent. This was clarified by the Berlin Appellate Court ("KG Berlin").


The case decided by the KG Berlin concerned a limited liability company ("GmbH") which had already been deleted from the commercial register in 2006 due to its lack of funds. As residual assets emerged over time, a supplementary liquidator was appointed in 2019. The supplementary liquidator was of the opinion that the concrete acts required towards the land registry (in this case: declaration referred to liens of property) required (i) the re-registration of the deleted GmbH and (ii) the registration as supplementary liquidator in the commercial register.

The corresponding application was rejected by the Local Court. The Company's appeal against had no success.

The decision of KG Berlin of November 9, 2021 (Case No. 22 W 68/21)

According to the court, the re-registration of the GmbH as a liquidation company and the registration of the liquidator in the commercial register could be omitted. This was because the registrations were not necessary. The expected scope and quality of the actions to be taken in the supplementary liquidation were minor. Even without registration, the supplementary liquidator could sufficiently prove his power of representation necessary for the performance of the transactions merely by his appointment by the court. A separate registration in the commercial register is not required.

Practical advice

Due to the various interests involved (company, shareholders, creditors of the company, public), the liquidation procedure of a company is a highly formalized procedure.

Usually, the liquidation begins with an internal company event, such as a shareholders' resolution, the expiry of the time stipulated in the partnership agreement, a change in the field of company´s activity, the achievement of the agreed object of the company or the retirement of the shareholders. The liquidation procedure is the process of liquidating the assets of the company. Only thereafter the company will be finally terminated by deletion from the commercial register. With the liquidation procedure, all assets of the company (company must now be special named as "Gesellschaft i.L.") shall be sold, all liabilities shall be paid and the remaining assets (if any) shall be distributed so that the liquidated company actually has no assets left at the end. In practice, frequent problems are the questions of the distributable assets and the liquidation measures still required (on this, for example: OLG Hamm, decision of 21.05.2021, ref. 27 W 25/21 and KG Berlin, decision of 10.09.2021, ref. 22 W 51/21).

Deletion due to lack of funds is a special case by law. First of all, the shareholders have no initiative in this case. They can only formally request for the deletion. The Court decides on the deletion. Since there are (normally) no assets left in the case of deletion because of lack of funds, the highly formalized legal liquidation procedure does not take place. However, liquidation proceedings are exceptionally required if it turns out after the deletion that there still distributable residual assets exist. The main cases in practice are (i) claims against shareholders and (ii) former board members. In such a situation, the court appoints a (supplementary) liquidator and the liquidation proceedings take place with the aforementioned purpose of liquidating the assets. As result that only residual assets of limited value have been found, the activities of the supplementary liquidator may also only be focussed on realizing these found residual assets through necessary individual measures and the distribution of the profits. Accordingly, the liquidator's power of representation of the the company is limited pursuant the appointment by the court.

Whether the company and the supplementary liquidator are (re-)registered in the commercial register in these cases is at the sole discretion of the court. Generally, the company and the liquidator should be registered. However - and the KG Berlin refers to this as a practical standard case - no registration in the commercial register shall occur if the scope and quality of the acts still to be performed by the liquidator are minor and registration is therefore not necessary.

A former decision of the KG Berlin was different (decision of May 11, 2021, 1 W 29/21). Therefore, the KG has sent its current decision from November 2021 to the Federal Court  for a decision (Ref. II ZB 20/21).

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