On 18 March 2015, the German Federal Government published a
draft bill to slightly amend the German Stock Corporation Act
(Aktiengesetz). Certain of the proposed amendments have
already been included in previous draft bills and presented in our
January 2011 and January 2012 newsletters. These comprise, among
Restrictions on bearer shares to prevent money laundering:
listed as well as non-listed companies still may issue registered
or bearer shares; however the issuance of bearer shares by a
non-listed company shall require excluding the right to demand
issuance of individual share certificates and the deposition of
global certificates; such restrictions will not apply to companies
listed with a regulated market since such companies are subject to
the provisions on disclosure of major holdings of voting
The issue of non-voting preference shares will no longer require
a mandatory cumulative preference right (Zwingende
Nachzahlung) which currently prevents their treatment as
regulatory core capital;
The permissibility of at least such mandatory convertible bonds
that allow for a conversion right of the issuer shall be explicitly
The right of individual shareholders to bring legal action to
declare void corporate resolutions shall be partially
In addition, the new draft bill provides for a record date for
registered shares in order to avoid share blocking and increase
participation in general meetings. Currently, a record date only
exists for listed companies that issued bearer shares. To attend
and participate in a general meeting, owners of bearer shares have
to prove that they have been shareholders of the company at the
beginning of the 21st day prior the general meeting. For registered
shares there is currently no corresponding provision. It is
therefore common practice that listed issuers of registered shares
will stop execution of share transfers in the share register
several days prior to the general meeting. Pursuant to the draft
bill, ownership on the 21st day preceding the general meeting shall
in future also decide the right to attend and participate in the
general meeting of companies that have issued registered
Currently, dividend obligations of the company become
immediately due. Pursuant to the draft bill, the right of dividend
payments shall only become due on the third business day following
the date of the general meeting. The intention is to align the
German practice to international market standards.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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