Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/4.3.5.2:4.3.5.2 Additional obligations that cannot be satisfied

Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/4.3.5.2

4.3.5.2 Additional obligations that cannot be satisfied

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

The first important reason to exit a GmbH was recognized in a judgment of the Court of the German Empire in 1930.1 This case concerned shareholders of a GmbH, who were subjected to considerable additional obligations (Nebenleistungen). The option to impose obligations on shareholders exceeding their capital contribution is enabled by § 3II GmbHG. In order for these obligations to arise, these obligations must be included in the articles of association.

The private limited company involved in this case produced sugar and related products from beets and cane sugar. About 175 shareholders were involved in the company. In addition to the obligation to contribute to the capital, the shareholders took up additional obligations towards the company. These additional obligations consisted of the obligation to cultivate and supply beets to the company. If a shareholder was not able to cultivate enough beets, he was obliged to purchase beets from third parties in order to fulfil his obligation to supply beets.

The transfer of the shares of the company was restricted. This restriction relates to the rule that any transfer required the prior approval of the board of directors. In case of denial of approval, the general meeting of shareholders was entitled to approve the transfer of the shares.

The Court of the German Empire observed that the additional obligations imposed on the shareholders have a continuous and constantly repeating character. The Court considered that if these additional obligations jeopardise the financial future of the complaining shareholder, it puts an unreasonable burden on this shareholder. According to the Court, it is of relevance that the shareholder could not resign from the additional obligation as such, while these obligations were inextricably connected to the shares.2If this obligation was not inextricably connected to the shares, the release of this obligation would have been a less far-reaching solution. This less far-reaching solution would bar application of the oppression remedy.3 Furthermore, the Court observed that the shareholder concerned had no opportunity to sell his shares. Whereas less far-reaching measures could not be attained, the Court ordered that in these limited circumstances an important reason to exit the company is present

Deze functie is alleen te gebruiken als je bent ingelogd.