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The Corporate Successor Liability
The Corporate Successor Liability
As per § 25 l of the German Commercial Code (HGB), no corporate successor liabilities are imposed upon the buying successor if the latter is a mere continuation of the predecessor’s corporation name
Cologne,
Nordrhein-Westfalen,
Germany
(prbd.net)
28/11/2012
http://www.grprainer.com/en/Company-Law.html As per § 25 l of the German Commercial Code (HGB), no corporate successor liabilities are imposed upon the buying successor if the latter is a mere continuation of the predecessor's corporation name.
GRP Rainer Lawyers Tax Advisers in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart www.grprainer.com elaborate: Even § 25 l of the German Commercial Code is not applicable in such a case. The Higher Regional Court of Cologne opined in its decision of the 02.12.2011 (Reference Number: 20 U 134/10), that it must be differentiated between the continuation of the corporate entity as trade name of its seller and the mere takeover of a business name. According to § 25 l of the German Commercial Code, all corporate liabilities established by the seller are imposed on the purchaser if the latter is a continuation of the seller's corporate identity. Such a continuation is conditioned by the retention of the corporate name.
In contrast, no successor liability is imposed, according to § 25 l of the German Commercial Code, in case of business takeover under mere retention of the seller's trade name; if such a name solely identifies the business or corporation in general or designates the branch of trade or constitutes another business description. Regarding the unintended legal gap on this matter, the Successor Liability issue regulated in § 25 l of the German Commercial Code is not applicable in this case.
The norms of corporate laws can be found within various other laws. The economic cases treated in corporate laws are complex and conflicting interests must thus often be taken into consideration. And even tax law problems must be carefully reflected on.
Yet, numerous liability risks could be incurred when it comes to corporate laws, even by corporate owners. The purchaser resuming business of a company might even be held accountable for liabilities established by the seller.
You are advised to seek an attorney qualified in corporate laws. He will provide you with individual and comprehensive advice on this matter.
If trouble arises within an existing corporation, you should seek an attorney who is able to help you overcome the problem thanks to his broad overview. It is of great importance to take action, under such circumstances, on the early stage: only then you and your corporation may avoid possible damages.
If you are planning to purchase a corporation, you are advised to seek support of an experienced attorney so that any possible risks can be prevented. An attorney working on the field of corporate laws can even help you draw the articles of partnership and association and thus to early obviate any problems.
http://www.grprainer.com/en/Company-Law.html
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About
Lawyers and tax advisors GRP Rainer http://www.grprainer.com/en/ international German law firm counsels on business law, commercial law, corporate and distribution law. The firm advises companies, corporations and mid-sized businesses from offices in Berlin Bonn Cologne Duesseldorf Frankfurt Hamburg Munich Stuttgart, Germany and London, UK. Contact: GRP Rainer LLP Hohenzollernring 21-23 50672 Cologne Germany T +49-221-2722750 law@grprainer.com http://www.grprainer.com/en/
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