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- Volume 2008, Issue 42, 2008
Transactions of the Centre for Business Law - Volume 2008, Issue 42, 2008
Volume 2008, Issue 42, 2008
Source: Transactions of the Centre for Business Law 2008 (2008)More Less
In a short personal résumé in connection with this research project, I wish to express my greatest thankfulness to Professor Henning for his patient guidance in the best academic tradition, demanding and at the same time rewarding, but at all times with a stimulating humour that kept me laughing long after. He is 'liable' for arousing my interest in company law and without his invaluable help, enthusiasm and unlimited scholarship this comparison would not have been written. Unforgettable will also be the meetings and fruitful discussions in London at the Institute of Advanced Legal Studies and in the inspiring atmosphere at Jesus College, University of Cambridge.
Source: Transactions of the Centre for Business Law 2008, pp 3 –6 (2008)More Less
In this chapter statistical data will be supplied to show the relevance of these two legal forms within their respective economies. GmbH and close corporation are the preferred instruments for entrepreneurs wishing to use as legal form one with, i.a., limited liability.
Source: Transactions of the Centre for Business Law 2008, pp 43 –78 (2008)More Less
Source: Transactions of the Centre for Business Law 2008, pp 79 –86 (2008)More Less
Both the GmbH and the close corporation aim at providing alternative legal options for small business entities, giving them a simpler and less expensive legal form, which satisfies their needs for flexibility while guaranteeing liability limitations and continuity. In addition, both entities are self-sufficient in that they do not rely on capital markets to fund their operations. With this in mind, the following chapter briefly compares a few characteristic features of each, specifics will be dealt with at a later stage.
Source: Transactions of the Centre for Business Law 2008, pp 87 –101 (2008)More Less
In order to incorporate their business entities and to achieve the status of a juristic person for the respective entity, members must comply with certain regulations dealing with the entity's foundation. These regulations share the aim that members must commit themselves to the business entity being established and provide it with the necessary means to start business. They also share the fact that they have to be registered with an official authority, this being the local court for the GmbH and the Registrar of close corporations for the close corporation. In both cases, after registration the public has to be informed. However, differences in this founding process exist reflecting the position of the GmbH as a 'Kapitalgesellschaft'. As the share capital required is meant to protect the creditors, the GmbHG sets out in detail provisions with regard to the members' contribution and its maintenance. In addition the position of a managing director is compulsory, he has specific tasks in the process of filing the formal application. Even with these differences in mind, it is interesting to compare some aspects of the founding process, i.e., provisions regarding name, domicile, transparency of financial matters, kind of business and amendment of articles of association and founding statement.
Source: Transactions of the Centre for Business Law 2008, pp 102 –117 (2008)More Less
Keeping their different origins in mind, the GmbH being a 'Kapitalgesellschaft' and the close corporation relying on partnership features, it will be interesting to see if this causes differences regarding membership in the respective entities. Modelled as entities for smaller entrepreneurs, the question of restrictions on the number of members and of who may become a member will be of relevance here. To discuss is also how membership is being expressed in the GmbH and the close corporation.
Source: Transactions of the Centre for Business Law 2008, pp 118 –122 (2008)More Less
Given the fact that both business entities are juristic persons they need organs to act for them. It will be interesting to see if differences between a more formally structured GmbH as a 'Kapitalgesellschaft' and the very closely held organizational form of the close corporation exist. Whether, e.g., members have the opportunity to actively take part in the business of the corporation because of equal management rights or if the organ of a managing director is being prescribed.
Source: Transactions of the Centre for Business Law 2008, pp 151 –158 (2008)More Less
Being juristic persons both entities need to act through organs. Regarding external relations the structures of the GmbH as a 'Kapitalgesellschaft' become apparent. They assign specific functions to each organ of the GmbH. As regulated in the Act, external relations fall into the competence of the managing director. Therefore, the Act itself makes a clear distinction between internal and external relations.
Source: Transactions of the Centre for Business Law 2008, pp 176 –184 (2008)More Less
It will be interesting to see if the different approaches regarding the number of members and liability regulations as well as the prescribed organ of a managing director in the GmbH play a role in this regard. Unlike for the GmbH the provisions regulating financial statements of the close corporation are relatively few.
Source: Transactions of the Centre for Business Law 2008, pp 185 –198 (2008)More Less
There are different ways through which an entity may be terminated. Invalidity, dissolution, liquidation, insolvency proceedings and composition are each the result of certain developments. Specific provisions deal with these developments. Both entities being juristic persons, it will be interesting to see if the procedures are similar.
Source: Transactions of the Centre for Business Law 2008, pp 199 –206 (2008)More Less
As both entities play an important role in their respective economies, it is relevant to discuss in which way provision is made in case the organizational form of the entities changes. It will be interesting to see if closeness of the entities reflects on these matters. Regarding the GmbH the 'Umwandlungsgesetz' of 1995 (Act on Conversions and Mergers) is relevant.
Source: Transactions of the Centre for Business Law 2008, pp 207 –210 (2008)More Less
A wide variety of factors must be taken into account regarding both commercial intentions and taxation considerations. Investment objectives, expected profit levels and distribution policies must be examined when deciding which organizational form is preferable from a tax point of view. Due to the vast number of tax aspects, it is only possible to give a brief outline in this context.
Source: Transactions of the Centre for Business Law 2008, pp 216 –226 (2008)More Less
In conclusion it can be said that within their socio-economic context both Acts are brief and uncomplicated statutes. This can be stated especially with regard to the CCA, which in an admirable and efficient way bridges the gap between the necessary legal structures of an industrial society and the abilities of a developing informal sector of the 'Rainbow Nation'.