Articles
of Association
Article
1
Name
and registered office
The name of the company shall be:
Example Verwaltungsgesellschaft mbH
The company shall have its registered office in ___________________.
Article 2
Scope of the company
- Scope of
the company shall be the administration of the company’s
own assets and any and all transactions connected therewith.
- The company shall be entitled to have holdings in other enterprises,
which shall include being a personally liable shareholder in such enterprises,
and to set up branch offices.
Article 3
Joint-stock capital, Paid-up capital
-
The joint-stock capital of the company shall amount to EUR 25,000.00
(in words: twenty-five thousand EUR).
-
The joint-stock capital shall be held as follows:
_____________Beteiligungs GmbH
a capital holding amounting to EUR 12,500.00
and
_____________Beteiligungs GmbH
a capital holding amounting to EUR 12,500.00.
Half the said capital holdings shall be paid up right away. An increase
of the joint-stock capital shall require a unanimous decision taken by
all the shareholders.
Article 4
Company organs
The organs of the company shall be:
a) the shareholder meeting and
b) the company management.
Article 5
Supervision of the company management
The shareholder meeting shall supervise the company management. It shall
have an unlimited right to obtain information and to investigate. The
company management shall follow its instructions.
Article 6
Shareholder meeting
-
The shareholder
meeting shall be convened by the company management by means
of a registered letter
sent to each shareholder, giving at least
three weeks’ notice and specifying the agenda and the place
and the time of the meeting. The day on which the letter is dispatched
and
the day of the meeting shall not be reckoned as part of the notice
period.
-
Each shareholder and the company management shall have the right to
make proposals for inclusion in the agenda and such proposals shall be
included in the agenda, always provided that they are received by the
company management at least eight days before the meeting. The company
management shall immediately inform all shareholders about such proposals.
-
A shareholder meeting not regularly convened may nevertheless take decisions,
always provided that all the shareholders are represented and that the
decision is taken unanimously.
-
The shareholder meeting shall be held at the registered office of the
company. It may also be held elsewhere within the European Union, always
provided that this be agreed by all the shareholders.
-
The shareholders shall alternate in taking the chair at shareholder
meetings. The chairman shall direct the meeting, determine the manner
in which votes are to be taken, the order in which the items on the agenda
are to be discussed, appoint a secretary to take the minutes and assure
that all decisions are regularly recorded in the minutes.
-
Each shareholder may demand that a shareholder meeting be convened by
the company management. Such a shareholder meeting shall be held within
six weeks of the making of the said demand.
-
Decisions of the shareholders may also be taken in writing or by telegramme,
always provided that no shareholder objects to this procedure. The result
of any decisions taken in this way shall immediately be communicated
to each shareholder.
-
Each shareholder may cause himself to be represented by a representative
with a written proxy or by another shareholder and attend the meeting
with the assistance of a third party is bound by law to treat the proceedings
as confidential.
-
The shareholder meeting may take decisions when all the shareholders
are represented.
-
When a shareholder meeting proves unable to take decisions, the company
management may convene a new shareholder meeting with the same agenda
within two weeks. The new shareholder meeting may take decisions if at
least half the joint-stock capital is represented; the convocation notice
shall draw attention to this fact. The first sentence of this paragraph
shall not apply when the meeting has to decide about the winding up of
the company or an amendment of the Articles of Association. Decisions
of the shareholder meeting shall be taken with a simple majority, where
abstention is not to be regarded as rejection, always provided that the
law or the present Articles of Association do not call for a different
majority.
-
A minute of record shall be prepared about each shareholder meeting
and shall be signed by the chairman and the person who took the minutes.
A copy of the said minute of record is to be sent to each shareholder
within three weeks of the meeting.
- The ordinary shareholder meeting shall be held not later than six months
after the end of the financial year. It shall decide about
a) the confirmation of the annual accounts,
b) the approval of the work of the company management,
c) the use to which the profit is to be put,
d) possibly the appointment of an auditor.
- Decisions of the shareholders may be contested only within a period
of two months after receipt of the decision. The contestation shall be
valid only if a court case is brought within this period.
Article 7
Company management and representation
-
The company shall have one or more managing directors. When only one
managing director is appointed, the company shall be represented solely
by him. When several managing directors are appointed, the company shall
be represented by two managing directors or by one managing director
acting jointly with a proxy holder.
The shareholder meeting may grant the authority to act alone in representing
the company to one, several or all managing directors and release them
from the limitations of Article 181 of the Civil Law Code.
-
The managing directors of the company shall be appointed and recalled
by the shareholder meeting.
-
The managing
directors shall have the obligation vis-à-vis the
company to comply with the limitations that are set to their authority
to represent and manage the company by the regulations of law,
the provisions of the present Articles of Association and the
decisions of the shareholder
meeting.
Article 8
Shareholder control rights
The managing director shall provide each shareholder with such information
as may be requested of him.
Each shareholder shall at all times have the right to carry out an examination
or a partial examination of the company at his own expense or have such
an examination carried out by a third party professionally obliged to
treat the examination as strictly confidential. To this end the managing
director shall permit each shareholder to inspect the company’s
books.
Article 9
Withdrawal (buy-back) of company shares
-
Subject to the agreement of the shareholder concerned, company shares
may be bought back at any time.
-
If the assets of a shareholder become subject to insolvency proceedings
or if the shareholder, either voluntarily or upon the order of a court,
opens negotiations for arriving at a composition with his creditors or
if a writ of compulsory execution of his company shares or other rights
in the company is applied for, the other shareholders may decide the
buy-back of his holdings in the company.
-
The rejection of a request for the opening of insolvency or composition
proceedings on the grounds of lack of adequate assets shall be deemed
to be equivalent to the opening of such proceedings. Voluntary composition
proceedings shall be deemed to have been opened on the day on which the
shareholder concerned approaches his creditors in writing with a view
to settling the situation by means of a voluntary composition.
-
The buy-back shall become effective upon the announcement of the decision,
but in the case of an individual writ of forced execution only one month
after the said announcement, always provided that the shareholder concerned
has not by that time avoided the commenced proceedings for a writ of
forced execution.
-
When company shares are mortgaged, the company may settle the claims
of the executing creditor and thus take back the company shares of the
shareholder concerned. The shareholder may not oppose the said settlement.
-
If a shareholder gives cause of sufficient importance to justify his
exclusion or, more particularly, if he violates an important obligation
imposed on him by the present Articles of Association, the other shareholders
may withdraw the shares he holds.
-
The shareholder concerned shall have no voting rights in connection
with the buy-back decision.
-
The indemnification
of the shareholder concerned and the takeover of his holdings
shall in all cases comply with the provisions of the present
Articles of Association (Article 13).
Article 10
Death of a shareholder
Should a shareholder die, his place shall be taken by his heirs. When
there are several heirs, they shall either name one of their number as
spokesman or appoint a person professionally obliged to maintain secrecy
(auditor, tax consultant, attorney or notary) to exercise their rights
at shareholder meetings. The said person shall be legitimated by means
of a written proxy.
Article 11
Duration of the company and financial year
-
The company shall remain in being for an indefinite period of time.
-
The financial year shall be the calendar year. The company shall come
into being upon its entry in the company register.
Article 12
Dissociation
-
Should a shareholder give notice of dissociation, the other shareholders
shall for a period of three months after receipt of the said notice have
the right to dissociate and withdraw at the same date. Their intention
to exercise this right shall be notified by means of a registered letter
addressed to the company.
-
When the other shareholders do not exercise this right, the shareholder
who has given notice shall be dissociated as envisaged in Article 9 hereinabove.
Article 13
Valuation and indemnification upon the dissociation of a shareholder
-
In all
cases of indemnification of a shareholder the value on the day
of his dissociation
of the shares
held by him shall be determined by
an appropriate company balance sheet to be drawn up by the company’s
tax consultant. In the said balance sheet the fixed assets and
the working capital are to be valued in accordance with the part
values set out in
Article 6, para.1, clause 1, third sentence, of EStG (Einkommensteuergesetz
= Income Tax Act.), while debts are to be entered at their face
value.
Good will is not to be taken into consideration. The dissociating shareholder
shall participate in the profit or loss of the financial year in course
at the time of his dissociation in proportion to the period of that year
for which he remained a shareholder.
-
The indemnification determined in this manner shall be paid in five
equal annual instalments, with the first of the said instalments becoming
due 1 (one) year after the date on which the dissociation becomes effective.
-
The outstanding part of the said indemnification shall bear interest
at a rate equal to the Federal German bank rate plus 2 % (two percent)
as from the day of the dissociation. The matured interest shall always
be paid together with the five annual instalments of the indemnification.
-
The shareholder may not demand that security be provided for the payment
of the indemnification.
-
The costs caused by the drawing up of the balance sheet as of the day
of the dissociation shall be borne by the dissociating shareholder.
-
With
a view to providing security covering claims of the company against
a shareholder
at the moment
of his exclusion, no matter what the reason
therefor, for example, upon the opening of insolvency proceedings
or the opening of proceedings for a accommodation with the creditors,
be
they forced or voluntary, the shareholder, upon the signature of
the present Articles of Association, shall assign all his claims
against
the company, especially the indemnification due to him in respect
of his holdings, to the company. At the appropriate time the
company may
deduct its claims against the shareholder from the shareholder’s
claims against the company.
Article 14
Annual accounts
-
The annual accounts, complete with a situation report, shall be prepared
by the company management within three months of the end of the financial
year and, whenever appropriate, are to be audited in accordance with
the provisions of law.
Wherever the law envisages facilitations for small joint-stock companies,
these shall be taken into account to the extent to which the conditions
therefor are satisfied.
-
The annual accounts and, where appropriate, the relevant report of the
auditors shall be sent to the shareholders, at the very latest together
with the invitation to the ordinary shareholder meeting.
Article 15
Profit
-
The profit shall be distributed among the shareholders in proportion
to their holdings in the company.
-
The shareholder meeting shall decide the use to which the profit is
to be put (formation of reserves, profit carried forward and/or distribution).
Article 16
Non-transferability of claims
The claims of the shareholders in respect of profit, indemnification
and cash in case of the company being wound up may not be transferred
to third parties.
Article 17
Winding up
Should the company be wound up, the shareholders, always provided that
they do not appoint one or more of the managing directors as liquidators,
shall agree the person who is to act as liquidator.
Article 18
Agreements to be made in writing
All agreements concerning the company made between the shareholders
or between the shareholders and the company shall be made in writing,
always provided that the law does not call for a notarial deed; oral
agreements shall be null and void.
Article 19
Miscellaneous other provisions
-
Announcements
of the company shall be made in the “Bundesanzeiger” (Official
Federal German Gazette).
-
Should any one provision of the present Articles of Association prove
to be or become ineffective or be declared to be ineffective on account
on account of obligatory provisions of law, this shall not affect the
validity of the remained of these Articles of Association not directly
connected with the ineffective provisions.
-
The ineffective provision shall as far as possible be re-interpreted
in such a manner, if necessary by amending the present Articles of Association,
that the purpose pursued by the said provision will attained as closely
as may be possible.
Article 20
Formation costs
The cost of the formation has to be carried by the formation founders.
Article 21
Competition prohibition
-
With
a majority of 75 % of the joint-stock capital entitled to vote
the shareholder
meeting may
decide to release individual or all managing
directors and/or individual or all shareholders from the prohibition
that requires them not to enter into competition with the company
in its field of activity as defined in Article 2 of the present
Articles
of Association. Such a release shall be limited solely to competitive
activities and shall not in any way affect their other fidelity
obligations vis-à-vis the (other) shareholders and the
company.
-
A shareholder affected by the said decision shall not be entitled to
vote on the occasion of the vote to grant release from the competition
prohibition, unless he happens to be the sole shareholder.
(Subject to alteration)
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