4.3.5.4.3 Integration as a subsidiary in a corporate group

A final example of fundamental change that may form an important reason to exit is the informal integration of the GmbH as a subsidiary in a corporate group.1 The German law regarding corporate groups is a complex and stil developing field. The law goveming the situation that an AG serves as a subsidiary company consists partly of codified law and partly of case law. With respect to the situation that a GmbH fulfils a role as a subsidiary company, statute does not comprehend mies, but a complex doctrine is available to which the courts have given shape.

The law that applies to the GmbH as a subsidiary company is partly grounded on the analogy with codified AG law. Moreover, the duty of loyalty plays an important role. Case law gives shape to this duty of loyalty.2 A corporate group is present when a company (parent company) has a dominant influence on a GmbH (subsidiary company) in a direct or indirect way.3

A further requirement for the exit right to arise is derived from the analogy of § 18 I1 AktG. Pursuant to the laffer provision, a corporate group is created if a company is brought under the uniform management of a parent company.4 An agreement to which both companies are party can provide rules for the relationship between the parent company and the subsidiary company. Most of these contracts have the form of a control agreement (Beherrschungsvertrag) or a profit distribution contract (Gewinnabführungsvertrag).5 According to general opinion, in order to conclude these contracts the prior approval of all shareholders of the GmbH is required. Consequently, a minority shareholder is in the position to prevent such a contract or to bargain for the purchase of his shares.6

The minority shareholder in an informal corporate group (faktischer GmbHKonzern) is in a more vulnerable position than in a formal corporate group, as in the case of an informal corporate group no contract is concluded. Most authors recognize that an exit right may arise if an actual corporate group is formed without the consent of a minority shareholder.7 Yet, the conditions regarding this exit right are considerably unclear. Within this group of authors, there is a lack of consensus about whether the mere presence of an actual corporate group suffices for the exit right to arise or whether more conditions have to be met. For instance, an additional condition may be conduct that is prejudicial to the interests of the minority shareholder.