4.3.9.1 Regulation of the exit right by the articles of association

The articles of association may contain rules relating to the exit right. On the one hand, the oppression remedy cannot be excluded, nor substantially restricted by the articles of association, because the oppression remedy is one of the fundamental rights of the shareholder.1It is allowed to widen the possibilities of a shareholder to exit the company. It is even possible to include an exit right at will in the articles of association.2

On the other hand, it is possible to include some restrictions on the exit right in the articles of association. In principle, there is freedom to give shape to the articles of association (Satzungsautonomie).3 The articles of association may contain restrictions regarding shareholders' rights that apply in the period between the exit notice and the actual exit. For instance, the voting right and the right to receive dividend can be restricted.4 Moreover, the articles of association may prescribe that the exit notice has to be in writing.

Furthermore, the articles of association may contain valuation mechanisms. It is allowed to incorporate restrictions on the compensation, which the shareholder receives in the case of exit on an important ground.5 As stated by the Supreme Court, restrictions on the compensation for the loss of shares can serve a twofold goal:

The implementation of the valuation mechanism in the articles of association requires the consent of all shareholders if the position of the individual shareholders will deteriorate after the implementation, i.e. the valuation mechanism leads to a lower compensation.7

Although it is allowed in principle to include valuation mechanisms in the articles of association that limit the compensation, these mechanisms have to take into consideration certain limitations. Valuation mechanisms contained in the articles of association can be subject to legal review in two respects. First, the valuation clause itself can be declared void by the court. This is possible if the valuation clause includes a significant imbalance between the full market value and the value resulting from the valuation clause from the outset. Secondly, the application of the valuation clause may be in conflict with the duty of loyalty. Consequently, the valuation clause may not be invoked, but is still valid. This will be possible if it appears afterwards that there is a significant imbalance between the full market value and the value resulting from the valuation clause.