How can I make my articles of association legally binding?
July 15, 2022 | 40,00 EUR | answered by Otto König
Dear Sir/Madam Lawyer,
I am Franceska Buchner and have recently founded a GmbH. We are a young company that specializes in the development and distribution of innovative software solutions. Now it is time to create the articles of association, and I am unsure how to do this in a legally secure manner.
The current situation is as follows: We have three shareholders, each holding 33 percent of the share capital. Each of us brings different competencies and resources to the company, and we want to ensure that all interests are adequately taken into account. Additionally, we want to establish clear regulations for the event that a shareholder leaves the GmbH or new shareholders join.
My concerns are that the articles of association may not be sufficiently precisely formulated, leading to inconsistencies or disputes. I want to ensure that all important points such as profit distribution, decision-making, liability issues, and exit modalities are clearly regulated.
Therefore, I am asking you how I can legally secure my articles of association. What clauses should definitely be included to avoid potential conflicts? Are there any special legal aspects I should consider when drafting the contract? What options are available to respond flexibly to changes in the company without compromising legal security?
Thank you in advance for your support.
Kind regards,
Franceska Buchner
Dear Mrs. Buchner,
Thank you for your inquiry regarding the design of your company contracts for your GmbH. It is understandable that you are concerned about a legally secure regulation of all important points to avoid possible conflicts among the shareholders and to be able to successfully lead the company. I am happy to provide you with some important advice on contract design that will help you to set up your GmbH in a legally secure manner.
First and foremost, it is important that all shareholders work together to draft and sign the company contracts in agreement. This is the basis for the contracts to be legally binding and must be adhered to by all parties. The company contracts should clearly and precisely regulate all relevant points to avoid room for interpretation and disputes.
In your case, where three shareholders each hold 33 percent of the shares, it is particularly important to clearly define profit distribution, decision-making, liability issues, and exit modalities. For example, it is advisable to establish a provision for management to clearly define who is authorized to make decisions and how they can be made. Profit distribution should also be fair and transparent to avoid disputes.
Furthermore, you should include clauses for the exit of shareholders to clearly regulate how shares are transferred and how the value of shares is determined in case of an exit. Likewise, you can establish provisions for admitting new shareholders to ensure that new partners can only be admitted with the approval of all shareholders.
To be able to respond flexibly to changes in the company, you should also include provisions for amending the company contracts. Here, you can stipulate that changes can only be decided with the approval of all shareholders to maintain legal certainty. It is advisable to regularly review the company contracts and make adjustments as needed to ensure they correspond to current circumstances.
In summary, it is important that your company contracts clearly and precisely regulate all relevant points to avoid possible conflicts and ensure legal certainty. When designing the contracts, it is best to seek support from an experienced attorney specializing in corporate law to ensure that all legal aspects are taken into account and the contracts are legally secure.
I hope that this advice is helpful to you and I am at your disposal if you have any further questions.
Sincerely,
Otto König
