As is the case on Anglo-American markets, an increasing number of company acquisitions are being practised in the Federal Republic as an instrument of external growth. The main reasons for this development are the structural changes as part of the introduction of the Single European Market and the special situation prevailing in the Federal Republic following the unification of the former two German states. The other motives and specific market mechanisms on which this increase in company acquisitions is based are not included in the following comments as these are mainly designed to show the legal prerequisites under which company acquisitions can be made in the Federal Republic and to what extent legal regulations in the Federal Republic differ from those in other legal systems.

A general definition of a company is of critical importance for the question of which rules of law have to be observed.

German law provides no uniform legal definition of a company. There are naturally a whole series of rules containing the legal structure of the individual corporate forms. A definition of the substance of a company in the individual corporate forms must always be determined by interpretation in the light of the purpose of the law.

The essential features applicable to each corporate form are the people and the tangible and intangible assets and goodwill which are controlled by a uniform organisation and serve a common economic purpose. Every company therefore consists of a combination of persons, assets, all types of rights, know-how, and organisation and interaction with third parties. The following comments are designed to show how such acquisitions of companies or company divisions are possible and which regulations apply in this process.

For further information please contact Dr Erich Michel, Wessing Berenberg-Gossler Zimmermann Lange, Freiherr-Vom-Stein-Strasse 24-26, Frankfurt am Maim 60323, Frankfurt, Germany- Tel: +496 997 1300, Fax: +496 997 130100.

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