On 31 December 2015 most of the amendments to German stock corporation law adopted under the so-called “Aktienrechtsnovelle 2016” have entered into force. The amendments are primarily aimed at affording to stock corporations a widened set of measures to strengthen their equity base and to enhance their financial resilience and at improving the transparency in relation to the ownership structure of non-listed companies. To these ends the following changes have been effected:

• To issue non-voting preference shares companies must no longer provide in their articles of association that dividends, which have not be fully paid in a business year (e.g., due to insufficient profits), need to be paid in the subsequent business year.
• Companies may choose to issue „reversed“ convertible bonds, affording a conversion right to the company, and to create conditional capital for this purpose.
• To enhance the transparency of their ownership structure, non-listed companies may no longer issue bearer shares, unless the rights of the shareholders to individual share certificates is excluded and a global share certificate is deposited with a depository bank or another entity qualifying as depository.

Further changes include the limitation of the previously generally applying requirement of the number of supervisory board members being divisible by three to companies which need to have a supervisory board under the German One-Third Employee Participation Act (Drittelbeteiligungsgesetz) and the introduction of a due date for dividend payments; the latter change will however only enter into effect on 1 January 2017.

For further information on the amendments please refer to the article „Bundestag adopts amendments to the German Stock Corporation Act”, which is published on this website. The German text of the amending law is available in the online version of the Federal Law Gazette(Bundesgesetzblatt), Part I, no. 55 dated 30 December 2015, p. 2565 et seq. If you have further questions concerning the amendments, please do not hesitate to contact Christine Oppenhoff.