Changes to commercial law in 2024

In par­ti­cu­lar, the law on part­nerships has been amen­ded, the Trans­pa­rency Re­gis­ter for com­ba­ting mo­ney laun­de­ring has been strengt­he­ned, the ca­pi­tal mar­ket is being mo­der­ni­zed and the frame­work for em­ployee share ow­nership are being im­pro­ved. In ad­di­tion, the scope of ap­pli­ca­tion of the Whist­leb­lo­wer Pro­tec­tion Act and the Supply Chain Due Di­li­gence Act has been ex­ten­ded.

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Mo­der­niza­tion of the law on part­nerships

Part­nership law in Ger­many has been mo­der­ni­zed with ef­fect from 1 Ja­nu­ary 2024. The so-cal­led Act on the Mo­der­niza­tion of Part­nership Law in­tro­du­ces struc­tu­ral chan­ges, par­ti­cu­larly for ci­vil law part­nerships.

The in­tro­duc­tion of a pu­blic re­gis­ter is plan­ned for ci­vil law part­nerships (GbR). The entry of a GbR in this re­gis­ter is not man­datory. Howe­ver, if the GbR owns real es­tate or holds sha­res in other com­pa­nies (e. g. GmbHs), the GbR must be en­te­red in the com­pany re­gis­ter from 1 Ja­nu­ary 2024.

Fur­ther tigh­te­ning of the Trans­pa­rency Re­gis­ter

The so-cal­led Fi­nan­cial Crime Pre­ven­tion Act pro­vi­des ad­di­tio­nal query rights to im­prove data qua­lity in the Ger­man Trans­pa­rency Re­gis­ter from 1 April 2024.

To com­bat mo­ney laun­de­ring in Ger­many, the be­ne­fi­cial ow­ners of all le­gal en­ti­ties un­der pri­vate law, re­gis­te­red part­nerships and other le­gal struc­tures must be re­cor­ded in this re­gis­ter via http://www.trans­pa­renz­re­gis­ter.de/. Vio­la­ti­ons of the trans­pa­rency ob­li­ga­ti­ons can re­sult in fi­nes of up to 150,000 eu­ros.

The newly co­di­fied ad­di­tio­nal powers of in­ves­ti­ga­tion are in­ten­ded to make it ea­sier to de­tect false ent­ries and in­itiate cor­rec­tions. In ad­di­tion, a real es­tate tran­sac­tion re­gis­ter will be es­ta­blis­hed to in­crease trans­pa­rency in the real es­tate sec­tor, which is sus­cep­ti­ble to mo­ney laun­de­ring, and to im­prove, in­ter alia, the fight against mo­ney laun­de­ring and the en­force­ment of sanc­tions.

Mo­der­niza­tion of the ca­pi­tal mar­ket and im­pro­ve­ment of the frame­work con­di­ti­ons for em­ployee share ow­nership

On 24 No­vem­ber 2023, the Ger­man le­gis­la­tor pas­sed the so-cal­led Fi­nan­cing for the Fu­ture Act to mo­der­nize the ca­pi­tal mar­ket and im­prove the frame­work con­di­ti­ons for em­ployee share ow­nership. In ad­di­tion to com­pre­hen­sive mea­su­res un­der busi­ness and fi­nan­cial mar­ket law, tax re­gu­la­ti­ons have been amen­ded

From 1 No­vem­ber 2025, in ad­di­tion to be­arer bonds, it will also be pos­si­ble to is­sue sha­res in Ger­many by en­te­ring them in an elec­tro­nic se­cu­ri­ties re­gis­ter as cen­tral re­gis­ter sha­res or crypto sha­res. Since the law came into force, dual-class sha­res with mul­ti­ple vo­ting rights can also be aut­ho­ri­zed wi­thin cer­tain le­gal li­mits.

Ac­cess to the ca­pi­tal mar­ket has been fa­ci­li­ta­ted for start-ups and small and me­dium-si­zed en­ter­pri­ses. To this end, the mi­ni­mum mar­ket ca­pi­ta­liza­tion for IPOs has been re­du­ced from EUR 1.25 mil­lion to EUR 1 mil­lion.

So-cal­led shell com­pa­nies can now also be es­ta­blis­hed in Ger­many as a coun­ter­part to Spe­cial Pur­pose Ac­qui­si­tion Com­pa­nies (SPACs) ba­sed on the Ame­ri­can mo­del. These are shell com­pa­nies with no ope­ra­ting busi­ness of their own whose func­tion is es­sen­ti­ally fo­cu­sed on rai­sing ca­pi­tal in or­der to take over an un­lis­ted com­pany and in­di­rectly list it on the stock ex­change.

The tax chan­ges in­clude, in par­ti­cu­lar, an im­pro­ve­ment in the frame­work con­di­ti­ons for em­ployee ca­pi­tal contri­bu­ti­ons with ef­fect from 2024. One of the aims is to make it ea­sier for young com­pa­nies to re­cruit and re­tain em­ployees. To this end, the tax-free al­lo­wance for as­set contri­bu­ti­ons to the em­ployee's com­pany has been in­crea­sed from EUR 1,440 to EUR 2,000. The al­lo­wance can also be used wi­thout re­stric­tion wi­thin the frame­work of de­fer­red com­pen­sa­tion. In ad­di­tion, the per­so­nal and tem­po­ral scope of ap­pli­ca­tion of the de­fer­ral of con­trol of the pe­cu­ni­ary ad­van­tage from as­set hol­dings has been ex­ten­ded and it has been cla­ri­fied that the de­fer­ral of con­trol can also be ap­plied to sha­res with a re­stric­tion on dis­po­sal (so-cal­led trans­fe­ra­ble sha­res).

The Whist­leb­lo­wer Pro­tec­tion Act also af­fects SMEs

The Whist­leb­lo­wer Pro­tec­tion Act is in­ten­ded to pro­tect per­sons who, in the course of their pro­fes­sio­nal ac­tivi­ties, be­come aware of vio­la­ti­ons of le­gal re­qui­re­ments and re­port them to a com­pe­tent aut­ho­rity. In or­der to pro­tect em­ployees, em­ploy­ers must im­ple­ment a cor­re­spon­ding whist­leb­lo­wer sys­tem in their com­pany. The ob­li­ga­tion came into force on 2 July 2023 and was pre­viously ap­plied to com­pa­nies with more than 249 em­ployees.

As of 17 De­cem­ber 2023, em­ploy­ers with bet­ween 50 and 249 em­ployees are also ob­li­ged to im­ple­ment a whist­leb­lo­wer sys­tem and to com­ply with the ob­li­ga­ti­ons re­sul­ting from the law to cla­rify the su­spi­cious ac­tivity re­port.

Supply Chain Due Di­li­gence Act ap­plies to com­pa­nies with at least 1,000 em­ployees

Since 1 Ja­nu­ary 2023, the Ger­man Supply Chain Due Di­li­gence Act re­qui­res com­pa­nies with at least 3,000 em­ployees to sys­te­ma­ti­cally and con­ti­nuously ad­dress hu­man rights, en­viron­men­tal is­sues and cor­po­rate due di­li­gence ob­li­ga­ti­ons and to com­ply with the re­sul­ting ob­li­ga­ti­ons.

From 1. Ja­nu­ary 2024, these ob­li­ga­ti­ons will also ap­ply to com­pa­nies with at least 1,000 em­ployees.