No authorization effect of the shareholders' list in event of abuse of rights

Only those who are entered in the shareholders' list of a German limited liability company ("GmbH") are formally considered shareholders and can exercise their rights. However, there is an exception if the GmbH has consciously submitted an incorrect list to the commercial register. That is stated in the decision of the Munich Higher Regional Court ("OLG").

Facts of the case

The decision of the OLG Munich is based on the following facts: The plaintiff was originally a 50% shareholder of the defendant GmbH. The other shareholder of the defendant is the heirs' community D, whereby one of the heirs is also the managing director of the defendant. At the shareholders' meeting on December 30, 2016, a resolution was passed to exclude the plaintiff from the defendant GmbH. The resolution was to serve as the basis for an action for exclusion. Afterwards the defendant filed accordingly an action for exclusion and the managing director submitted a new shareholders' list to the commercial register, in which the plaintiff was no longer listed as a shareholder. An objection to the new shareholders' list was entered in the commercial register on March 8, 2017. In 2019 the dissolution of the defendant was resolved. However, the plaintiff had neither been invited to the shareholders' meeting nor had he attended. Furthermore, a decision on the action for exclusion had not been made at this time. Therefore, the plaintiff filed an action for annulment against the resolution to dissolve the company.

The decision of the OLG Munich of January 24, 2024, case no. 23 U 9287/21

The OLG Munich dismissed the defendant's appeal and confirmed the decision of the lower court, as the plaintiff was still a shareholder of the defendant. Therefore, the plaintiff was to be invited to the meeting as a shareholder. The non-invitation thus led to the nullity of the resolutions passed in the shareholders' meeting. The plaintiff had also not lost his shareholder status as a result of the exclusion resolution; this effect would only occur with the legally effective court exclusion decision. Nor could the defendant invoke the negative legitimation effect of the shareholders' list, as the defendant itself had submitted the incorrect shareholders' list to the commercial register through dishonest behavior.

Practical note

Every GmbH must file an up-to-date shareholders' list in the commercial register. And in case of changes to the shareholders, the shareholders' list must be updated by the managing directors (or, if a notary is involved, by the notary). The shareholders' list might only have a formally impact. However, a shareholder who is not entered in the list filed in the commercial register is not considered a shareholder in relation to the GmbH (§ 16 Para. 1 of the German Limited Liability Companies Act ("GmbHG")). As a result, the non-registered shareholder cannot assert any membership rights and obligations; therefore, he / she must be denied, for example, the exercise of voting rights, participation in shareholders' meetings, the right of appeal, etc. Vice versa, a person who is registered as a shareholder and is not (no longer) a shareholder is still formally entitled to all membership rights and obligations in relation to the GmbH. Even if the shareholders' list has no effect on the actual ownership, only the person who appears on the list can exercise their shareholder rights (so-called legitimation effect). The shareholders' list should therefore always be kept with the utmost care, as otherwise there is a risk of the shareholder position being undermined. Although the law restricts the legitimizing effect of the shareholders' list in cases of abuse of rights, this restriction only applies in exceptional cases where the GmbH has acted dishonestly.