The Special Representative in german Stock Corporation Law

Assertion of Claims for Damages against the Management Board, Supervisory Board by the Annual General Meeting and Shareholders in Germany

Within the organizational structure of the german stock corporation, the supervisory board is responsible for asserting and enforcing claims of the stock corporation against current and former members of the management board. In contrast, the management board of the stock corporation is responsible for asserting claims for damages against members of the supervisory board.

In potential liability cases, there are then often conflicts of interest which lead to the management board and supervisory board not actively pursuing the assertion. In this case, the German Stock Corporation Act (AktG) gives shareholders the option of obliging the responsible body to make a claim against the management board and/or supervisory board (Art. 147 para. 1 AktG) or to appoint a so-called special representative to make the claim (Art. 147 para. 2 AktG).

For a non-binding mandate inquiry, please contact one of our experts directly by telephone or e-mail or use the contact form at the bottom of this page.

Legal Expertise in the Field of Special Representatives

Our highly qualified and specialized team of attorneys and specialists in german corporate law at our offices in Hamburg, Berlin, Munich, Frankfurt and Cologne will advise you on all issues relating to special representatives under german stock corporation law. Members of our team are also academically involved in the subject of lawsuit admissions procedures, so that we have special know-how in this area.

The range of advice provided by our stock corporation lawyers can be described as follows:

  1. Preparation of or defense against the adoption of a resolution by the annual shareholders' meeting to assert claims for damages
  2. Preparation of and defense against resolutions of the annual shareholders' meeting to appoint a special representative
  3. Preparation or defense of actions against resolutions of the general meeting in connection with Art. 147 of the German Stock Corporation Act (AktG)
  4. Advising stock corporations in the event of the appointment of a special representative
  5. Assertion of claims for damages against the management board / supervisory board as special representative

From the legal conception, the special representative starts his activity in particular if a previously conducted special audit has revealed a breach of duty on the part of the management board and/or supervisory board. It should be noted that special auditors and special representatives differ not only slightly in their formal legal status but also in their rights and duties.

Annual General Meeting - Resolution on the Compulsory Assertion of Damages in Germany

According to Art. 147 par. 1 AktG, the annual general meeting in Germany may resolve by simple majority that claims against members of the management board of the stock corporation must be asserted by the supervisory board. In matters relating to corporate groups, it is questionable whether the majority of shareholders can also demand that claims be asserted against controlling companies and their representatives.

The shareholders can only pass a resolution at the annual shareholders' meeting on the mandatory assertion of claims if the resolution has been duly announced. Publication may be unnecessary if the report of a special auditor ("special audit report") exists as an agenda item. The announcement of the agenda item " assertion of claims for damages" may be made as part of the invitation or may be requested by a minority of shareholders in Germany.

If the members of the management board concerned are themselves shareholders, they are prohibited from voting on the resolution (Art. 136 AktG).

However, Art. 147 par. 1 AktG also applies in the case of claims by the german company against current or former members of the supervisory Board. Here, as well, the shareholders can enforce the assertion by means of a resolution.

Annual General Meeting - Appointment of a special representative

If the shareholders in Germany do not wish to rely on the competent body to assert their claims, the majority of shareholders are free to appoint their own representative, the so-called special representative, by simple majority resolution at the annual general meeting for the purpose of asserting claims out of court and/or in court.

Minority of Shareholders - Appointment of a Special Representative in german Court

German stock corporation law assigns a special right to minority shareholders in connection with the assertion of claims for damages. According to Art. 147 para. 2 sentence 2 of the German Stock Corporation Act (AktG), the court must also appoint a special representative at the request of shareholders whose shares together amount to one tenth of the capital stock or the pro rata amount of one million euros. However, according to an arguably controversial opinion, the prerequisite is that the annual shareholders' meeting has previously resolved to assert claims for compensation.

Incidentally, the german court only examines the minority shareholders' application to determine whether the appointment of the special representative "appears expedient for the proper assertion of claims. If this is the case, the court appoints an independent expert as special representative.

Special Representative - Rights, Duties, Dismissal in Germany

With his appointment, the special representative in Germany moves to the same level as the other organs of the AG; he is himself an organ of the AG. As such, the special representative has not insignificant rights of inspection and also rights of information, because he can only fulfill his role, his task, with the help of these. The manner of assertion - out of court or in court - is at the discretion of the special representative. In the course of his examination and decision-making, he may also come to the conclusion that claims do not exist or that the assertion is not in proportion to the possible "return".

The special representative in Germany may be dismissed either by the shareholders' meeting or by the court, depending on who appointed him.

Action Admissibility Procedure

In addition, (minority) shareholders can apply to the german court under the so-called admissibility to sue procedure (Art. 148 AktG) to be allowed to assert the AG's claims for damages in their own name on behalf of the AG.

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