Corporate law – legal advice & information

Corporate law - legal advice & information

Corporate law is an essential area of law that is of great relevance to founders, managing directors and shareholders. The objective of corporate law is to regulate the establishment, management and termination of companies and to protect the interests of both the companies and the individuals involved.

As company law is important for everyone involved in the business world, it is advisable to deal with it at an early stage and take the necessary legal steps. Individual wishes and needs can be taken into account to ensure that the company is legally protected and that its activities are in line with the applicable laws and regulations.

Table of contents

  1. Introduction to company law
  2. Establishment and legal forms of companies
  3. Liability and representation
  4. Corporate law: articles of association and statutes
  5. Corporations and their bodies
  6. Mergers, acquisitions and reorganisations
  7. Insolvency and liquidation in corporate law
  8. Competition law and antitrust law
  9. Employee rights and employer obligations
  10. Taxes and accounting
  11. Intellectual property protection in corporate law
  12. Corporate law: final summary

Introduction to corporate law

Corporate law is a complex area of law that combines various sub-areas of law and helps companies to operate in compliance with the law. Some important aspects of company law are explained in more detail below.

Commercial law and the German Commercial Code (HGB)

Commercial law governs the legal relationships of merchants and is codified in the Commercial Code (HGB). It contains regulations for:

  • Commercial traders
  • Commercial agents
  • Commercial business
  • Commercial register

The German Commercial Code distinguishes between sole traders and trading companies. Sole traders are natural persons who operate a commercial business, while trading companies can be partnerships or corporations that operate a commercial business. Examples of trading companies are the OHG, KG, GmbH and AG.

Corporate law

Company law deals with the formation, management and termination of companies. It regulates the rights and obligations of the shareholders as well as the liability and representation of the company. Company law distinguishes between partnerships and corporations.

Commercial partnerships (e.g. GbR, OHG, KG) are based on the personal co-operation of their partners, while corporations (e.g. GmbH, AG) are based on the capital investment of the partners.

An example of a recent court ruling in the area of company law is the judgement of the Federal Court of Justice (BGH) of 23 February 2021 (II ZR 282/19), in which the BGH clarified the liability of GmbH managing directors in the event of a delay in filing for insolvency.

Labour law

Labour law is of great importance for companies as it defines the legal framework for the employment of employees. It includes individual labour law, which regulates the relationship between employer and employee (e.g. employment contracts, protection against dismissal), and collective labour law, which concerns the relationship between employers and employee representatives (e.g. works councils, trade unions).

An important law in labour law is the Dismissal Protection Act (KSchG), which regulates protection against dismissal for employees in Germany.

Tax law

Tax law regulates the taxation of companies and includes various types of tax such as corporation tax, trade tax, VAT and wage tax. Companies must fulfil their tax obligations and comply with the relevant laws and regulations.

One example of a recent court ruling in the area of tax law is the judgement of the Federal Fiscal Court (BFH) from 14 October 2020 (XI R 25/18), in which the BFH ruled that the VAT exemption for intra-Community deliveries also applies if the buyer initially stores the goods in Germany.

Insolvency law

Insolvency law regulates the legal framework for companies that are insolvent or over-indebted. Insolvency proceedings serve the orderly winding up of insolvent companies and the satisfaction of creditors. The Insolvency Code (InsO) is the central law in this area.

An important ruling in insolvency law is the judgement of the Federal Court of Justice (BGH) of 18 September 2019 (IX ZR 16/18), in which the BGH ruled that an insolvency administrator is also liable for old liabilities if he has continued the company after the opening of insolvency proceedings.

Competition law and antitrust law

Competition law and antitrust law serve to protect free and fair competition on the market. The Unfair Competition Act (UWG) regulates competition law, while the Act against Restraints of Competition (GWB) defines antitrust law in Germany. Examples of infringements of competition law include misleading advertising, unfair business practices or the violation of trade secrets.

Antitrust law focuses on preventing market dominance, controlling mergers and penalising price fixing. One example of a recent court ruling in the area of competition law is the judgement of the Federal Court of Justice (BGH) of 28 January 2021 (I ZR 207/19), in which the BGH ruled that the sale of branded goods via online marketplaces cannot be generally prohibited under certain conditions.

Corporate law and the protection of intellectual property

The protection of intellectual property is of great importance for companies in order to protect their innovations, brands and designs and ensure their competitiveness. This includes patent law, trade mark law, copyright law and design law.

One example of a recent court ruling in the field of intellectual property is the judgement of the Federal Court of Justice (BGH) of 21 April 2020 (X ZR 36/19), in which the BGH ruled that a patent infringement may also exist if the patented process is only carried out in part in Germany and in part abroad.

Compliance and corporate governance

Compliance refers to adherence to legal regulations, internal guidelines and ethical principles within a company. Corporate governance refers to the management and monitoring of companies by the Executive Board, Supervisory Board and Annual General Meeting.

Good corporate governance is an important component of successful company management and helps to strengthen the trust of shareholders, employees and the public. Companies should implement an effective compliance management system (CMS) to ensure compliance with legal requirements and minimise liability risks.

To summarise, corporate law is an extremely diverse area of law that is of great importance to companies. In order to fulfil the legal requirements and ensure the long-term success of the company, it is advisable to seek professional advice and support from a lawyer.

Corporate law: founding and legal forms of companies

Choosing the right legal form is crucial when setting up a company and influences numerous aspects such as liability, taxation and organisational structure. Some common legal forms are explained in more detail below to provide an insight into their legal characteristics and differences.

Sole proprietorship

A sole proprietorship is the simplest legal form for self-employed persons and freelancers. It is run by a natural person who has unlimited liability. A sole proprietorship is not entered in the commercial register, unless it is a registered trader (e.K.).

Civil law partnership (GbR)

The GbR is a partnership that is founded by at least two partners. It is the simplest form of partnership and is suitable for small businesses and freelance activities. The liability of the partners is unlimited and joint and several.

Offene Handelsgesellschaft (OHG)

The general partnership is a commercial company that is founded by at least two partners and is entered in the commercial register. The partners have unlimited and joint and several liability for the company’s obligations. The OHG is suitable for larger companies that want a clear separation of assets and liability.

Kommanditgesellschaft (KG)

The KG is a commercial partnership in which at least one partner (general partner) has unlimited liability and at least one other partner (limited partner) has limited liability. The KG is suitable for companies that want to protect some of their partners from unlimited liability.

Limited liability company (GmbH)

The GmbH is a limited liability company in which the liability of the shareholders is limited to their contributions. It is one of the most frequently chosen legal forms in Germany and is suitable for medium-sized and large companies. The formation of a GmbH requires a minimum share capital of €25,000.

Aktiengesellschaft (AG)

The AG is a corporation in which the liability of shareholders is limited to their contributions. The formation of an AG requires a minimum capital of 50,000 euros. The AG is particularly suitable for large companies that wish to trade their shares publicly.

Partnerschaftsgesellschaft (PartG)

The partnership company is a partnership that was specially developed for professional activities, such as for doctors, lawyers or architects. It makes it possible to limit the liability of partners for professional errors. The PartG can also be founded as a partnership company with limited professional liability (PartG mbB), in which liability for professional errors is limited to the company’s assets.

European Company Limited by Shares (SE)

The European Company (Societas Europaea, SE) is a corporation that is established under EU law and is recognised in all EU member states. The SE is suitable for companies that operate across borders or wish to enter the European market. The formation of an SE requires a minimum capital of 120,000 euros.

In summary, it can be said that choosing the right legal form for a company is an important decision that influences many aspects such as liability, taxation and organisational structure.

In order to find the best legal form for your own company and to ensure a smooth start-up process, it is advisable to seek the advice and support of an experienced lawyer.</blockquote

Liability and representation in company law

Liability and representation are of great importance in corporate law, as they determine the legal responsibilities of entrepreneurs and companies. The various aspects of liability and representation in companies are explained in more detail below.

Corporate liability

Directors’ and officers’ liability refers to the liability of managing directors, board members and other bodies of a company for their actions and decisions. The executive bodies are liable both to the company and to third parties.

Liability of shareholders

The liability of shareholders depends on the chosen legal form of the company. In partnerships, partners have basically unlimited liability, whereas in corporations, liability is limited to the capital contribution.

Liability for representatives

Representatives, such as authorised signatories or authorised agents, can act on behalf of the company and conclude contracts. The company is liable for the actions of the representatives, provided they act within the scope of their authorisations.

Liability for employees

Companies are liable for the actions of their employees if they are acting within the scope of their contractual obligations (Section 831 BGB).

Liability for unlawful acts

Companies can be liable for unlawful acts committed by their executive bodies, representatives or employees. Liability can be both civil and criminal in nature.

Limitation and exclusion of liability

Companies can attempt to limit or exclude their liability through contractual provisions. However, limitations and exclusions of liability are only permitted in certain cases and must comply with legal requirements.

D&O insurance in corporate law

D&O insurance (Directors and Officers Liability Insurance) can be taken out to cover the personal liability of company bodies, representatives and employees. D&O insurance offers protection against the financial consequences of breaches of duty and unlawful acts.

Corporate law: articles of association and bylaws

Articles of association and bylaws are fundamental documents that regulate the structure, rights and obligations of shareholders as well as the organisation and management of companies. They are crucial for the successful establishment and management of a company and should be carefully drafted and adapted to the respective needs and requirements.

Various aspects of articles of association and bylaws are explained in more detail below.

Content of articles of association and bylaws

Partnership agreements and articles of association generally contain provisions on the following aspects:

  • Name, registered office and purpose of the company
  • Legal form and capital structure
  • Rights, obligations and liability of the shareholders
  • Bodies of the company, such as management, management board and supervisory board
  • Decision-making and passing resolutions
  • Profit distribution and loss sharing
  • Inclusion and withdrawal of shareholders
  • Conversion, merger and dissolution of the company

Drafting articles of association and statutes

When drafting articles of association and bylaws, care should be taken to ensure that they comply with legal requirements and meet the needs of the shareholders and the company.

Changes to articles of association and bylaws

Over time, the requirements and needs of a company may change, making it necessary to amend the articles of association and bylaws. Amendments to articles of association and bylaws are subject to certain conditions and procedures, such as shareholder approval and entry in the commercial register.

A recent court ruling in the area of articles of association and statutes is the judgement of the BGH of 14 January 2020 (II ZR 193/18), in which the BGH ruled that a clause in a partnership agreement that provides for a qualified majority to amend the articles of association is generally permissible, provided that it does not violate the duty of good faith.

Company agreements and articles of association in connection with conversions and mergers

In the case of company transformations and mergers, amendments or adjustments to articles of association and bylaws are often necessary to reflect the new structure and organisation of the merged or transformed company.

In such cases, the companies involved must carefully examine which regulations need to be amended or supplemented and how the interests of the shareholders can be safeguarded. This can include, for example, the adjustment of capital structures, the reorganisation of executive bodies and decision-making structures as well as regulations on profit distribution and loss sharing.

Corporate agreements and articles of association when founding a company

Partnership agreements and articles of association are of particular importance when founding a company, as they form the basis for the cooperation between the shareholders and the organisation of the company. When drawing up these documents, founders should carefully consider which regulations are required for their company and how they can best protect their interests, rights and obligations.

Corporate agreements and articles of association in the event of corporate crises

In corporate crises or insolvency situations, partnership agreements and articles of association can play a decisive role by containing provisions for dealing with financial difficulties, the reorganisation of the company or the handling of insolvency.

In such cases, companies should check in good time whether their articles of association and bylaws contain suitable provisions and whether adjustments are necessary in order to minimise liability risks and enable an orderly resolution of the crisis.

Partnership agreements and articles of association are therefore essential elements for the establishment, management and further development of a company. They should be drawn up carefully, reviewed regularly and adapted to the changing needs and requirements of the company in order to ensure successful cooperation between the shareholders and efficient organisation and management of the company.

Corporations and their organs in corporate law

Corporations, such as the GmbH and the AG, are characterised by their own legal personality and the limitation of liability to the company’s assets. The management and control of corporations is the responsibility of their executive bodies, which can differ depending on the legal form. The most important bodies of corporations and their special legal features are described below.

1. management and board of directors

The management (in the case of a GmbH) or the board of directors (in the case of an AG) is the managing body of a corporation and is responsible for managing the business and implementing the corporate strategy. Members of the management or executive board are legal representatives of the company and are personally liable for their breaches of duty. Different liability standards apply for the GmbH and the AG.

2. supervisory board

The supervisory board is a mandatory body for the AG, but optional for the GmbH. Its function is to monitor and control the management or the executive board. Members of the supervisory board can be exposed to liability risks, particularly if they breach their monitoring duties.

3rd Annual General Meeting

The Annual General Meeting is the supreme body of an AG and has far-reaching decision-making powers, such as the adoption of the annual financial statements, the appropriation of profits and the discharge of the Management Board and Supervisory Board. Shareholders exercise their membership rights at the Annual General Meeting and can defend their interests there.

In the case of a GmbH, there is no general meeting, but rather shareholders’ meetings in which the shareholders exercise their rights.

4. Compliance and corporate governance

Corporations are obliged to ensure compliance with laws, internal guidelines and ethical principles (compliance) and to ensure good corporate governance. This applies in particular to the company’s executive bodies, which must implement and monitor corresponding structures and processes. In the event of breaches of compliance requirements, the executive bodies can be held personally liable.

5th One-Third Participation Act and co-determination

In Germany, larger corporations are affected by the statutory regulation on employee co-determination. The One-Third Participation Act (DrittelbG) stipulates that one third of the members of the supervisory boards of companies with more than 500 employees must be elected by the employees. For companies with more than 2,000 employees, the Co-Determination Act (MitbestG) applies, which stipulates equal representation on the Supervisory Board.</p

In both cases, it is important to observe the legal requirements and correctly implement employee participation on the Supervisory Board.

6. Liability risks for executive bodies of corporations

The executive bodies of corporations must always observe the legal requirements and their duty of care when carrying out their activities. They can be held personally liable if these duties are breached.</p

Corporate law: mergers, acquisitions and reorganisations

Mergers, acquisitions and reorganisations are important aspects of corporate law as they have a significant impact on the companies involved, their shareholders and employees. This section explains the legal framework and the various forms of mergers, takeovers and reorganisations in more detail.

Merger: A merger is a form of amalgamation in which two or more companies merge to form a new company or one company is transferred to another. The legal basis for a merger can be found in Sections 2 ff. German Reorganisation Act (UmwG).

Splitting: Splitting is a form of reorganisation in which a company is split into two or more independent companies. The legal basis for the demerger is set out in Sections 123 et seq. UmwG are available.

Squeeze-out: The squeeze-out is a form of takeover in which a majority shareholder forces the remaining minority shareholders out of the company in return for payment of appropriate compensation. The legal basis for the squeeze-out can be found in sections 327a et seq. of the German Stock Corporation Act (AktG).

Asset deal and share deal: When acquiring a company or parts thereof, a distinction can be made between an asset deal and a share deal. In an asset deal, individual assets (e.g. real estate, machinery) are transferred, while in a share deal, the shares in the target company are acquired.

Management buy-out (MBO) and management buy-in (MBI): A management buy-out (MBO) is a form of takeover in which the management of a company acquires the shares of the company from the previous owners. This can result in the company becoming the property of those who already run it.

Management buy-in (MBI) is a similar transaction, but where external managers acquire the shares of the company and replace the current management.

Leveraged buyout (LBO): A leveraged buyout (LBO) is a form of takeover in which a company is acquired with the help of loans. The assets of the acquired company are used as collateral for the loans taken out. LBOs are often associated with high levels of debt, which the acquiring company must later reduce.

It can be said that mergers, acquisitions and reorganisations are complex and multifaceted processes that require careful planning and knowledge of the legal framework. In order to achieve the best possible results in such transactions, it is important to know the various forms, their legal basis and the respective advantages and disadvantages and to take them into account accordingly.

Insolvency and liquidation in corporate law

Insolvency and liquidation are key aspects of corporate law that play a decisive role in the termination or restructuring of a company. Important legal issues and regulations in this context are explained below.

  • Insolvency proceedings

Insolvency proceedings are court proceedings for the orderly liquidation of an insolvent or over-indebted company. The aim is to satisfy creditor claims in the best possible way and, if necessary, to reorganise the company. The Insolvency Code (InsO) regulates the procedure and defines the rights and obligations of the parties involved.

A recent court ruling on insolvency proceedings is the judgement of the Federal Court of Justice (BGH) of 27 January 2022 (IX ZR 70/20), in which the BGH ruled that insolvency administrators can be held personally liable if they breach their duties.

  • Duty to file for insolvency

Managing directors and board members of corporations have a statutory duty to file for insolvency pursuant to Section 15a InsO if the company becomes insolvent or overindebted. A breach of this obligation can lead to personal liability.

In the judgement of the BGH of 15 November 2018 (IX ZR 95/17), for example, it was decided that managing directors of a GmbH can be personally liable in the event of late filing for insolvency.

  • Reorganisation and restructuring

The reorganisation and restructuring of companies are alternatives to liquidation in order to make the company competitive again and restore its solvency. This also includes court proceedings such as protective shield proceedings or self-administration proceedings.

The Act on the Further Shortening of Residual Debt Discharge Proceedings (Act on the Reorganisation and Restructuring of Companies, StaRUG) has offered additional instruments for the preventive restructuring of companies outside of insolvency since 2021.

  • Liquidation

Liquidation is the orderly process of terminating and winding up a company. It involves settling all liabilities and distributing the remaining assets to the shareholders.

The liquidators are responsible for initiating and carrying out the necessary steps to terminate the company, including cancelling contracts, disposing of assets and deregistering with the relevant authorities.

Difference between insolvency and liquidation

Although both insolvency and liquidation are aimed at settling a company’s debts and ending its business activities, there are significant differences between the two processes. Insolvency primarily concerns insolvent or over-indebted companies and is regulated by court proceedings.

Liquidation, on the other hand, is a voluntary or court-ordered process to terminate a company, regardless of its financial situation.

International insolvency proceedings

In a globalised economy, companies can also find themselves in insolvency situations that have cross-border aspects. The European Insolvency Regulation (EU Insolvency Regulation) regulates the competences and applicable law within the member states of the European Union in such cases.

In addition, there are international agreements such as the UNCITRAL Model Law, which facilitates cooperation between different jurisdictions in cross-border insolvency cases.

Competition law and antitrust law

Competition law and antitrust law are key elements of corporate law, as they are designed to ensure fair competition and prevent the abuse of market power. Companies must comply with the requirements of competition law and antitrust law as part of their business activities in order to avoid legal consequences. Important aspects of competition law and antitrust law as well as current court judgements are explained below.

1. competition law

The purpose of competition law is to prevent unfair competition between companies and to make the market transparent and fair. Central regulations on this can be found in the Unfair Competition Act (UWG). Companies are required to minimise their business practices, such as

    • Advertising
    • Distribution
    • and pricing, adapt to the requirements of the UWG in order to avoid competition law infringements.

A recent court ruling in the area of competition law is the judgement of the Federal Court of Justice (BGH) of 28 November 2019 (I ZR 23/19), in which the BGH ruled that companies can be obliged to change their advertising with a cease-and-desist declaration in the event of anti-competitive advertising.

2. antitrust law

Antitrust law deals with the prevention of abuses of market power and the maintenance of free and fair competition. The central regulations of German antitrust law are set out in the Act against Restraints of Competition (GWB). Companies must also comply with European antitrust law, in particular the EU treaties.

Acts relevant under antitrust law include, among others:

    1. Price fixing and market manipulation
    2. Territorial and customer protection agreements
    3. Abuse of a dominant market position
    4. Merger control

An example of antitrust case law is the judgment of the European Court of Justice (ECJ) of 24 October 2018 in Case C-265/17 P (Commission v Groupe Canal+), in which the ECJ confirmed the imposition of a fine on a company for anti-competitive agreements.

3. merger control

Merger control is a central instrument of antitrust law that serves to monitor mergers between companies and prevent possible negative effects on competition.

In Germany, the Federal Cartel Office is responsible for merger control, while the European Commission fulfils this task at European level. Companies must comply with the antitrust regulations for planned mergers and obtain authorisation if necessary.

An example of a merger control decision is the approval of the acquisition of LinkedIn by Microsoft by the European Commission on 6 December 2016 (case M.8124).

Corporate law: employee rights and employer obligations

Employee rights and employer obligations are fundamental aspects of company law, as they govern the relationship between employer and employee. Companies must comply with the legal requirements in labour law in order to avoid legal disputes and possible sanctions.

Employment contracts and working conditions

Employment contracts are the legal basis of the employment relationship and regulate, among other things, salary, working hours, holidays and notice periods. When drafting employment contracts, employers must observe the legal requirements, such as the Minimum Wage Act (MiLoG) and the Part-Time and Fixed-Term Employment Act (TzBfG).

Occupational health and safety

Employers are obliged to ensure the health and safety of their employees in the workplace. To this end, they must comply with the provisions of the Occupational Health and Safety Act (ArbSchG) and the accident prevention regulations. Examples of occupational health and safety measures include the provision of personal protective equipment, the implementation of risk assessments and compliance with working time regulations.

Dismissal protection in company law

The Protection against Dismissal Act (KSchG) protects employees from unjustified dismissal and ensures that dismissals may only be made for certain reasons. When dismissing employees, employers must comply with the legal requirements, such as compliance with notice periods and consultation with the works council.

Equal treatment and protection against discrimination

The General Equal Treatment Act (AGG) prohibits discrimination on the basis of race, ethnic origin, gender, religion, ideology, disability, age or sexual identity. Employers must ensure that they do not apply discriminatory criteria when hiring, promoting, remunerating and making other personnel decisions.

Workplace co-determination and company law

The Works Constitution Act (BetrVG) regulates the participation and co-determination rights of employee representatives, in particular the works council. Works councils have a right of co-determination for

    • social,
    • personal
    • and economic matters, such as the introduction of new technologies, personnel planning and operational changes

.

Employers must respect the rights of the works council and involve it in corresponding measures.

Data protection in the employment relationship

Data protection in the employment relationship is another important aspect of employee rights. Employers must comply with the provisions of the European General Data Protection Regulation (GDPR) and the German Federal Data Protection Act (BDSG), particularly when processing the personal data of their employees.

To summarise, it should be noted that employee rights and employer obligations form a complex set of rules that encompasses both legal and practical aspects. Companies should keep up to date with the latest developments in employment law and adapt their HR practices accordingly to minimise potential legal risks.

Taxes and accounting in company law

The correct handling of taxes and accounting is of great importance for companies to ensure legal compliance and avoid potential legal and financial risks. Important aspects of tax and accounting are explained below.

Tax obligations

Companies are obliged to fulfil their tax obligations arising from various tax laws, such as the Income Tax Act (EStG), the Corporate Income Tax Act (KStG), the Sales Tax Act (UStG) and the Trade Tax Act (GewStG). This includes in particular

    1. The timely submission of tax returns

.

    1. The correct calculation and payment of taxes

.

  1. Compliance with record-keeping and documentation obligations.

Bookkeeping

Bookkeeping is not only a tax obligation for companies, but also an obligation under commercial law. According to Section 238 of the German Commercial Code (HGB), merchants are obliged to keep books and systematically record their business transactions and the position of their assets. The bookkeeping must comply with the principles of proper accounting (GoB).

Important aspects of bookkeeping include

    1. The completeness, accuracy and clarity of the records
    2. The timely posting of business transactions

.

  1. The retention of receipts and documents.
  2. Compliance with statutory retention periods.

Electronic bookkeeping and GoBD

The principles for the proper keeping and storage of books, records and documents in electronic form and for data access (GoBD) are of particular importance for companies that handle their accounting electronically. The GoBD sets out the requirements for electronic bookkeeping and the electronic storage of receipts and documents in order to comply with legal requirements.

Important aspects of the GoBD are

  1. The immutability and traceability of electronic records
  2. The completeness and accuracy of electronic accounting
  3. The security and availability of electronic data.
  4. Compliance with statutory retention periods for electronic records.

International tax issues in corporate law

The issues of double taxation, transfer pricing and international tax treaties are of great importance for internationally active companies. Companies must observe the respective national tax laws and tax treaties (e.g. double taxation agreements) for cross-border business transactions in order to avoid possible double taxation or tax conflicts.

Tax audits

Companies are subject to tax audits, which are carried out by the tax authorities to check the correctness of accounting, tax returns and tax payments.

Companies should be prepared to make their accounting documents and receipts available to the auditors and to assess and minimise potential tax risks in advance

.

Protection of intellectual property in corporate law

The protection of intellectual property is crucial for companies to protect their innovations and intellectual capital. The following explains various aspects of intellectual property protection as well as examples, laws and recent court judgements.

1. patents

Patents offer companies comprehensive protection for technical inventions. They grant the patent holder the exclusive right to commercially utilise the invention for a certain period of time. In Germany, the German Patent and Trade Mark Office (DPMA) is responsible for granting patents. Companies must register their inventions and fulfil the legal requirements for patentability.

2. trade marks

Trademarks are signs that distinguish the goods and services of one company from those of other companies. Trade marks can take the form of words, logos, colours or other signs. Registering a trade mark with the DPMA or the European Union Intellectual Property Office (EUIPO) grants the owner comprehensive protection against imitation and trade mark infringement.

3. copyright

Copyrights arise automatically with the creation of a work and do not require registration. However, companies must take care not to commit copyright infringements, for example by using third-party works without the author’s consent.

Copyright law protects works of:

    • Literature
    • Science
    • Art

Examples in corporate law include:

    • Text
    • Images
    • Music
    • Software

4. Registered designs and designs

Design patents (also known as design protection) protect the external appearance of a product, such as

    • Shape
    • Colour
    • Material

In order to obtain protection, the design must be new and have its own design level. Designs can be registered at national level with the DPMA or at EU level with the EUIPO.

5. Know-how and trade secrets

Know-how and trade secrets comprise valuable information and experience that can give a company a competitive advantage. Know-how and trade secrets are primarily protected by contractual agreements (e.g. non-disclosure agreements) and operational security measures.

The German Trade Secrets Act (GeschGehG), which regulates the protection of trade secrets in Germany and complies with EU Directive 2016/943, has been in force since 1 April 2019.

6. Enforcement of intellectual property rights

Companies must actively enforce their intellectual property rights in order to protect them effectively. This can be done, for example, through warning letters, injunctions or actions for damages or injunctive relief.

A recent court ruling on the enforcement of intellectual property is the judgement of the Federal Court of Justice (BGH) of 25 November 2020 (I ZR 153/18), in which the BGH ruled that the entitled party can request information about the name and address of the infringer under certain circumstances when prosecuting trademark infringements on the Internet.

Corporate law: final summary

Corporate law is a complex area of law that is of great importance for the establishment, management and termination of companies. In order to minimise legal risks and ensure the long-term success of your company, sound legal advice is essential.

Our Law Firm Herfurtner is experienced in advising and representing clients in all matters of corporate law. If you have any questions or require legal support in the area of corporate law, we will be happy to assist you. Our lawyers can advise and represent you competently and reliably.

Lawyer Wolfgang Herfurtner Germany

Wolfgang Herfurtner | Lawyer | Managing Director | Shareholder

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