Reporting and oversight duties for dormant stock corporations

Under stock corporation law, the executive board is responsible for managing the company, while the supervisory board is tasked with oversight. The executive board is legally required to provide the supervisory board with regular and comprehensive information. Statutory provisions mandate periodic (typically quarterly) reporting by the management board to the supervisory board. Additionally, the supervisory board may request further information when necessary for supervisory purposes. However, questions arise when the management board fails to adequately inform the supervisory board.

The Federal Court of Justice (BGH) addressed this issue in its ruling of October 14, 2025 – II ZR 78/24.

Facts (in short)

The Federal Court of Justice based its decision on the following facts: The defendant was a supervisory board member of X-AG, whose articles of association specified insurance transactions as its corporate purpose. At the end of 2012, X-AG ceased operations. In 2015, the management board resumed business, engaging in real estate transactions that contravened the articles of association – of which the defendant was unaware. The plaintiff entered into real estate transactions with X-AG, resulting in enforceable payment claims, which X-AG failed to satisfy in full. Consequently, the plaintiff seized and assigned X-AG's alleged damages claims against the defendant for collection, asserting that the defendant had breached his supervisory board duties by insufficiently monitoring the management board, specifically by failing to insist on regular reporting. This breach of duty, according to the plaintiff, resulted in damages for which X-AG was liable.

The Federal Court of Justice (BGH) ruling of October 14, 2025 – II ZR 78/24

In contrast to the prior decisions of the Berlin Regional Court and the Berlin Court of Appeal, the Federal Court of Justice found that the defendant, as a member of the supervisory board of X-AG, had breached his duties. While the management board is generally required to keep the supervisory board informed – even without being asked – regarding all matters relevant to oversight, any deficiencies in this reporting place an active duty on the supervisory board to obtain the necessary information for effective supervision. This duty to insist on adequate reporting applies not only to the supervisory board collectively, but to each individual member.

This responsibility persists even if the company has ceased its business operations. According to the Federal Court of Justice, the supervisory board cannot simply expect the management board to inform it of any resumption of activities. As long as the company has not been dissolved, the legal obligation to oversee the management board based on sufficient information remains in full force.

The Federal Court of Justice remanded the case to the Berlin Court of Appeal for further factual determinations.

Practical note

The statutory duties of the management board and the supervisory board under stock corporation law have long been interpreted stringently by the courts. The present decision by the Federal Court of Justice reaffirms this approach.

In light of this, supervisory boards are strongly advised to rigorously enforce reporting obligations and to assertively request all information necessary for effective oversight of the management board – even, if required, through legal recourse.