Current Developments in Corporate Law and M&A

Amendment to the Law Governing Stock Corporations failed to pass the Upper House of Parliament

The long-discussed new law to amend the Law governing stock corporations failed to pass the Upper House of Parliament on September 20. In its last session before the Bundestag election, the German Länderkammer, as expected, vetoed the "Act on improving the control of Management Board remu-neration and to amend further regulations relating to the law governing stock corporations" by using its political composition that is different from the Bundestag. The legislative procedure must therefore begin anew after the elections to the Bundestag and the original amendment to the law governing stock corporations 2011 is to be discussed again.

With the amendment to the law governing stock corporations, the political parties did not only want to learn from the experience of the financial crisis and to resolve changes on management board remu-neration, which then caused the law to fail for political reasons on German state level. The amendment to the law governing stock corporations would also have resolved numerous previous editorial ambiguities from earlier amendments of the law, which have been coordinated in full across party lines and could have been implemented without political discrepancies. If it had been possible to separate these topics, there would have been clarity on technical issues, which had been creating uncertainties for the general shareholders' meetings of corporations again and again in the last few years. It remains to be seen when the political parties will make a new attempt after the election results from last weekend. Until then, corporations must continue to deal with the uncertainty, which has become well known in the meantime.

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