Frequently Asked Questions and their Answers about Stock Company

Questions and answers about stock company

Here we try to provide answers to typical questions from our customers on the subject of stock corporations.
Of course, if you have further questions related to your individual situation, then talk to us.

Questions and answers - stock company

 

What is a German stock company?

Just like a GmbH, a German stock company (Aktiengesellschaft) as a legal form is a capital company. As a corporation, it is a legal entity and therefore has rights and obligations that exist independently of the owners. The shares of the company are held by shareholders. They are the joint owners of the company. The Shareholders’ co-determination rights are based on their share in the registered capital.

How is a German stock company (Aktiengesellschaft) formed?

The process of forming a German stock company is subject to strict regulations stated in the German Stock Corporation Act. The formation process of the AG in detail:
– Preparation and notarisation of the articles of association
– Acquisition of the shares by the founders
– Appointment of the board of directors, the management board, and the auditor
– Deposit of contributions (cash or transfer of contributions in kind)
– Preparation of the formation report and subsequent formation audit
– Application for entry in the commercial register
As soon as the company has been entered in the commercial register, it officially exists as a German stock company (Aktiengesellschaft).

What types of shares are there?

Registered shares can be made out to natural persons or legal entities. They are transferred by means of a written agreement. The name of the new shareholder is entered in the company’s stock ledger.

Bearer shares differ from registered shares in that the holder of a bearer share is not designated by name on the share certificate and is usually not required to furnish proof of rightful ownership. Bearer shares are transferred informally and by delivery.

Recently, there has been a clear trend toward registered shares, which have certain advantages over bearer shares.

What are the corporate bodies of the German stock company (Aktiengesellschaft)?

A German Aktiengesellschaft has three corporate bodies: the general assembly (Hauptversammlung), the Supervisory board (Aufsichtsrat) and the Executive board (Vorstand).
General assembly: The general assembly, general meeting resp. represents the shareholders and exercises their rights. It is convened once a year. Extraordinary general meeting can also be held if necessary for the good of the company.
Supervisory board: The Supervisory board is the controlling body of the AG. In addition to appointing and dismissing the management board, it also appoints the auditor if needed. The Supervisory board reviews the annual financial statements.
Executive board: The Executive board is responsible for the operational business of the stock company. The The Executive board represents the company externally.

How are German stock company shares transferred?

If shares are transferred from one holder to another, no special form is required. However, the type of shares must be considered. A non-securitised share, for example, can be transferred by assignment. In the case of “restricted” registered shares, however, the general assembly of the AG must give its approval.

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