Shareholder

The shareholder is the holder of a share in the share capital of a stock corporation or partnership limited by shares ("limited shareholder") and thus has a membership interest in it. The status of shareholder can be obtained by the formation of a stock corporation (original acquisition) on the primary market or by purchase on the secondary market or by inheritance (derivative acquisition). Shareholders can be both natural persons and legal entities. Shareholders are among the internal stakeholders of a company.

Rights and duties of the shareholder

The share capital of the AG is divided into shares in accordance with § 1 (2) AktG. The share is a security in which the rights and obligations of the shareholder are securitized.

General membership rights

The membership rights of the shareholder are divided into administrative rights (control rights) and property rights. Administrative rights include

• the right to participate in the Annual General Meeting,
• the right to information (Section 131 AktG) and
• the right to challenge resolutions of the Annual General Meeting (section 243 AktG).

In contrast, the following are included under the term property rights

• the entitlement to the share in the balance sheet profit (so-called dividend, Section 58 (4), Section 60 AktG),
• the subscription right in the case of a rights issue (Section 186 (1), Section 211 AktG),
• the repayment claim in the event of a capital reduction (Section 225 (2) AktG),
• the claim to a share in the liquidation proceeds (§ 271 AktG) and
• various compensation, exchange and settlement claims under transformation and group law (inter alia § 304, § 305, § 320 AktG, § 15, § 29 Transformation Act).

Rights of action

German stock corporation law is characterized by the peculiarity that, although the shareholder has the possibility to file an action for rescission or nullity against resolutions of the shareholders' meeting, he generally has no claims for performance or damages against his fellow shareholders and the members of the management board and supervisory board. This restrictive attitude towards shareholders' rights of action is based, on the one hand, on the idea that shareholders and members of executive bodies only have a legal relationship with the company. Shareholders should not exercise their rights individually, but rather in the General Meeting (cf. Section 118 (1) AktG). Furthermore, the decision-making ability and personal responsibility of the members of the management board and supervisory board should not be jeopardised by too light a liability towards the shareholders. Only a few rights of action for shareholders have been installed in the law - apart from actions for rescission and nullity:

• Section 304, Section 305 AktG: Claims between shareholders in the event of the existence of a control and profit and loss transfer agreement
• Section 117 (1) sentence 2, (2) AktG: Shareholders' claims in the event of intentional use of influence over the company
• § 310 i. In conjunction with section 309 (4) AktG: claim of the company asserted by shareholder against members of the management in the event of the existence of a control agreement
• Section 318 in conjunction with Section 317 (1) sentence 2 AktG: Shareholders' claims in the event of de facto grouping
• Section 323 (1) AktG: claim of the company asserted by a shareholder against members of the management in the event of an integration

Apart from these individual claims, actions for injunctive relief and removal may only be brought by a shareholder in exceptional cases, namely if the corporate bodies impair the shareholder's membership rights beyond what is covered by law or the articles of association. Actions for obligations aimed at forcing the management board or supervisory board to take certain decisions or actions are generally inadmissible, as they would jeopardize the independence of the management bodies. Claims for damages against members of executive bodies acting in breach of their duties are reserved for the Company. The management board asserts claims for damages against members of the supervisory board, and the supervisory board asserts claims for damages against the management board. In addition, shareholders have the option of initiating proceedings to enforce a claim under the narrow conditions set out in section 147 of the AktG.

Fiduciary duty

The fiduciary duty generally refers to the duties of consideration and loyalty of the participants in a company. Vertical fiduciary duties, i.e. those between the company and the individual shareholder, have long been recognised by case law. In contrast, the existence of horizontal fiduciary duties, i.e. duties of loyalty between shareholders, was affirmed only late. In the 1976 "Audi/NSU" decision, the Federal Court of Justice (BGH) still denied the existence of such duties on the grounds that the mere fact of belonging to a stock corporation did not in itself constitute a mutual legal relationship from which liability could be derived. A turnaround occurred in 1988 with the "Linotype" decision, in which at least a fiduciary duty of the majority shareholder towards the minority shareholders was recognised. Horizontal fiduciary duties have been fully recognised since the "Girmes" decision of 1995, in which the BGH also imposed fiduciary duties on the minority shareholder vis-à-vis the majority.

Rights and duties of the shareholder

The shareholders generally exercise their rights in the affairs of the Company at the Annual General Meeting (Section 118 (1) AktG). At the General Meeting, each ordinary share (in contrast to the preference share) grants one voting right. With the supervisory board (CH: administrative board), the general meeting (CH: shareholders' meeting) elects a supervisory and advisory body which appoints the members of the management board. The management board must also present the annual financial statements, the management report and the report of the supervisory board to the general meeting (without a corresponding vote). One of the powers of the Annual General Meeting is to discharge the Management Board and the Supervisory Board by resolution. Other resolutions to be passed annually by the Annual General Meeting include the vote on the proposal for the appropriation of profits by the Management Board and Supervisory Board and the election or re-election of the Company's auditor.