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Passing resolutions in the limited liability company in times of Corona - alternatives to the shareholders' meeting in attendance

Even in the third "Corona year" now dawning, shareholders in limited liability companies ("GmbHs") are often faced with the question of how to pass resolutions effectively but without the risk of contagion. Shareholders' meetings in presence are generally permissible under the current regulations, but are often unreasonable depending on the size and composition of the group of shareholders.

The GmbH Act is based on the principle of face-to-face meetings. In addition, resolutions may also be passed by a so-called circulation procedure. In this case, all shareholders must agree to this procedure or to a specific resolution proposal in text form (e.g. by post, e-mail, fax). If only one shareholder refuses, the resolution is blocked. This generally applies in cases where the articles of association do not provide for any facilitation. The legislator recognized the associated problems at an early stage and lowered the barriers for the statutory circulation procedure as early as spring 2020: It is currently sufficient if "only" the majority of shareholders vote in favor of the procedure or directly in favor of the specific resolution within a certain period. As things stand at present, this regulation will continue to apply until August 31, 2022.

No regulation applies to the holding of shareholders' meetings by telephone or video conference. The practice is often faster: in many companies, shareholders connected online are treated as "real" participants. However, this is legally risky. Without appropriate clarification by the legislature or the courts, this practice can result in the contestability or invalidity of the resolutions adopted - even if all shareholders agree. For this reason, purely virtual or hybrid shareholders' meetings are only recommended if they are explicitly regulated in the articles of association.

In practice, it can be helpful if the shareholders first exchange views in a telephone or video conference and then adopt resolutions (exclusively) by circular resolution. It is also possible for the online participants to authorize one of the present attendees to vote. For documentation purposes, it is recommended that this be done in text form (e-mail), unless this is already required by the articles of association. Even if there is hope that the worst phase of the pandemic is behind us, the current problems should be cause for modernizing the rules on passing resolutions in the articles of association.

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