The Liquidation of a UG / GmbH The Liquidation of a UG / GmbH The cancellation of a limited liability entrepreneurial company, abbreviated as UG, is a multi-stage process regulated in the Commercial Code (HGB) and the Law concerning Limited Liability Companies (GmbHG). The following overview summarizes the essential steps and legal requirements: 1. Reasons for Cancellation The termination of a UG can be initiated through voluntary liquidation or by other legally regulated circumstances. A resolution for voluntary dissolution requires a shareholder resolution with a majority as defined by the partnership agreement. Without a contractual arrangement, a majority of 75% of the votes cast is required. 2. Liquidation Process After dissolution, the UG enters the so-called "liquidation stage," in which the company's assets are liquidated and all liabilities are settled. The steps in detail:
Section 12 (4) of the Corporation Tax Act last applicable for the fiscal year 2020 Section 12 (4) of the Corporation Tax Act last applicable for the fiscal year 2020 § 12 para 4 was repealed in 2021. At the same time, the following changes were introduced: § 34 para 3c KStG§ 8 para 1 in the version of Article 3 of the Act of June 25, 2021 (Federal Law Gazette I p. 2056) is also to be applied to assessment periods before 2021 § 34 para 6d KStG§ 12 para 4 in the version applicable on June 30, 2021, is to be applied for the last time for the assessment period 2020.§ 8 para 1 sentence 4 KStGFor corporations as defined in § 1 para 1 with headquarters abroad, whose place of management is located domestically and which are not to be treated as legal persons under domestic corporate law due to lack of legal capacity, services and promises of services between the corporation and persons who earn income as defined in § 20 para 1 number 1 and 9 of the Income Tax Act from this corporation, are to be treated for the purposes of implementing taxation with income taxes like services and promises of services between a legal corporation and its shareholders.
BGH Decision of February 16, 2021 - II ZB 25/17 BGH Decision of February 16, 2021 - II ZB 25/17 In the Federal Court of Justice's (BGH) decision dated February 16, 2021, the court addressed for the first time the issue of the legal capacity of a Limited company following Brexit. The reasoning in the decision states as follows: "The participant can no longer invoke the freedom of establishment regulated in Articles 49 and 54 TFEU after the United Kingdom's withdrawal from the European Union." According to Article 50(3) in conjunction with Article 1(3) TEU, the TEU Treaty ceases to apply to a member state that has withdrawn from the European Union from the day the withdrawal agreement comes into effect, or otherwise two years after the notification of withdrawal. Thus, the EU legislator has made a generally applicable explicit regulation concerning the temporal validity of the TEU Treaty. In the withdrawal agreement, the United Kingdom and the European Union agreed that the United Kingdom...
Workers' Compensation Board Limited Workers' Compensation Board Limited If you, as an entrepreneur of a Limited company, have received a notice from the professional association in which you are personally assessed because the legal capacity of the Limited has allegedly been lost, we recommend filing an objection. You can download a possible non-binding template of such an objection here...
LTD shareholders as a company subject to VAT according to § 2 UStG LTD shareholders as a company subject to VAT according to § 2 UStG In the previous post, we reported on the information letters from the tax offices regarding the Federal Ministry of Finance's letter dated December 30, 2020. These letters are currently being supplemented by letters informing the LTD shareholder personally of a VAT number, or announcing the allocation of VAT numbers. Usually, these letters refer to the Federal Ministry of Finance's letter dated December 30, 2020, and additionally note that the LTD will continue to be treated as a subject of corporate tax due to the Brexit Tax Accompanying Act. As a result, the tax offices assume that taxes for LTDs will be declared using two tax numbers in the future. The existing tax number of the LTD will continue to be used for the corporate tax declaration. A VAT number assigned personally to the entrepreneur will be used for VAT declarations. These letters typically do not come with legal remedy instructions but are likely to have regulatory content and thus represent an administrative act against which legal remedies are permissible. You can download a non-binding sample of a corresponding objection further below. Before possibly initiating legal action, you should ...
Letter from the Tax Office Recognizing the Limited Company after Brexit Letter from the Tax Office Recognizing the Limited Company after Brexit Currently, tax offices are sending out informational letters, referring to the BMF letter dated December 30, 2020. In these letters, the tax offices inform that, according to the BMF letter dated December 30, 2020, a Limited company will no longer be treated as a corporation starting from January 1, 2021. We have already provided our legal assessment on this matter in several posts. If these are purely informational letters from the tax office, we suggest the following non-binding letter, although you should also coordinate the approach with your tax advisor beforehand. If needed, you can also download the letter in Word format. Alternatively, we are of course also available for individual legal advice. However, always pay special attention to whether the letters to you or the LTD contain binding statements with specific regulations and/or a legal remedy instruction. In such cases, it is necessary to examine separately whether legal remedies...
The Legal Capacity of the Limited after Brexit The Legal Capacity of the Limited after Brexit As of 12/31/2020, the United Kingdom has notably exited the EU internal market. What implications does this have for the Limited in Germany? First, it should be noted that this question is currently not uniformly answered. Ultimately, it will have to be resolved by the courts. However, the blanket statement that the Limited in Germany is no longer legally valid because this corresponds to the supreme court jurisprudence in Germany seems premature. Such representations were mainly spread by authorities in mass circulars to Limiteds. It is true that the BFH in its decision (resolution of January 8, 2019, II B 62/18) among other things, determined that the legal capacity is governed by the so-called incorporation theory if a company is effectively established in an EU member state, a member of the EEA, or a state treated as equivalent to these on the basis of a treaty in terms of freedom of establishment according to its regulations. This initially means that EU companies and companies from states with which a corresponding treaty has been concluded are legally valid in Germany, and the company in Germany is additionally recognized as a corporation with corresponding limited liability to the company assets. If the company is not from such a state, it can still be legally valid (as a partnership) if it has more than one shareholder. However, it will not be recognized as a corporation. Thus, there is personal liability for the shareholders. Interim result: According to BFH jurisprudence, companies are legally valid if they have at least two shareholders or are effectively established ...