In the draft master contract, all the shares of a fictitious company are to pass from the seller to the buyer. The following comments are designed to show whether and to what extent the rulings included in the master contract are valid under German law and whether other contract modalities are required in a stock purchase agreement in Germany.

Attention is first of all drawn to the fact that shares in certain legal entities may only be transferred in a notarised form under German law contrary to the master contract. This is particularly the case with shares in limited liability companies. A stock purchase agreement and stock assignment agreement on shares of a limited liability company (GmbH) is invalid under German law unless it has been authenticated by a notary.

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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