Sports betting cheaters cannot become managing directors

Certain criminal offenses prevent an appointment as managing director. The registration in the commercial register requires a proper statement of assurance to the commercial register. The criminal offenses to be mentioned in the statement must be carefully examined.

Facts

The case decided by the Federal Court of Justice (Bundesgerichtshof, "BGH") concerned the registration of an appointed managing director in the commercial register. In the statement of assurance required for his registration, the latter stated as follows:

„Es liegen keine Umstände vor, aufgrund derer ich nach § 6 Abs. 2 Satz 2 Nr. 2 und 3 sowie Satz 3 GmbHG vom Amt eines Geschäftsführers ausgeschlossen wäre.

a) Während der letzten 5 Jahre wurde ich nicht rechtskräftig verurteilt […] nach § 263 StGB (Betrug), § 263a StGB (Computerbetrug), § 264 StGB (Subventionsbetrug), § 264a StGB (Kapitalanlagebetrug), § 265b StGB (Kreditbetrug), § 266 StGB (Untreue) oder § 266a StGB (Vorenthalten oder Veruntreuen von Arbeitsentgelt). Auch im Ausland wurde ich nicht wegen einer vergleichbaren Tat rechtskräftig verurteilt.“

[English translation (the statement of assurance has to be made in the German language): "There are no circumstances because of which I would be excluded from the position as managing director pursuant to Sec. 6 para. 2 Sentence 2 Nos. 2 and 3 and Sentence 3 of the German Limited Liability Companies Act (GmbHG).

a) During the last 5 years, I have not been convicted [...] pursuant Section 263 of the German Criminal Code (fraud), Section 263a of the German Criminal Code (computer fraud), Section 264 of the German Criminal Code (subsidy fraud), Section 264a of the German Criminal Code (capital investment fraud), Section 265b of the German Criminal Code (credit fraud), Section 266 of the German Criminal Code (embezzlement) or Section 266a of the German Criminal Code (withholding wages and salaries). I have not been legally convicted of a comparable offense in a foreign country either."]

The court rejected the application for registration because the necessary statement of assurance did not formally meet the legal requirements. It lacked Sections 265c-265e of the German Criminal Code (sports betting fraud). The managing director objected to this decision with the complaint.

The decision of the BGH of June 28, 2022 (Case No. II ZB 8/22)

The objection was unsuccessful. The BGH clarified that the managing director must also affirm in the statement that he has not been convicted of sports betting fraud. The statement of assurance to be provided must also cover these new criminal offenses. The reason for this is that the legislator wanted to create a comprehensive incapacity to act as managing director for persons who have committed a fraud offense. The statement of assurance is formally incomplete and therefore not legally valid if such criminal offenses are missing in the statement of assurance. In this case, a registration of the managing director in the commercial register cannot be made.

Practical advice

The content of the application for registration in the commercial register must be carefully examined. This applies to the initial registration of a managing director as well as to any change of the managing director and as well as to the registration of liquidators. The rejection of an application due to a formal incompleteness is annoying and avoidable. Thus, samples should not be adopted, because they bear the risk of inaccuracies and incompleteness.

On registration, managing directors must personally affirm that there are no circumstances that prevent their appointment. Managing directors cannot be (so-called obstacles to appointment),

• who is legally incapacitated or has only limited legal capacity,
• who requires supervision in financial matters,
• who is subject to a judicial or official ban on exercising a profession or trade in the area of the object of the company, or
• who has been convicted of certain economic offenses in Germany or abroad in the last five years.

With its decision, the BGH has provided clarification on the scope of the required exemption from criminal punishment. This includes all property crimes. For this reason, the further developments in criminal law must also be kept in mind and examined on an individual basis. A blanket statement of assurance that there is no obstacle to appointment is not sufficient. In order to avoid a rejection of the registration, the application and the statement of assurance of the managing director should at least briefly name the relevant criminal offenses – then the existence in the person of the managing director should be denied (insofar as that is correct).

The following applies: An application to the commercial register must always be checked for correctness and completeness.