von Göler (Hrsg.) / Marcus Baum, Felix Graulich / § 15

§ 15 Transfer of shares

(1) Shares shall be alienable and inheritable.

(2) If a shareholder purchases further shares in addition to his original share, these shall remain legally independent.

(3) An agreement concluded in notarial form shall be required for the transfer of shares by shareholders.

(4) An agreement establishing the shareholder’s obligation to transfer a share shall likewise require notarial form. However, an agreement concluded without such notarial form shall become valid once the transfer agreement is concluded pursuant to subsection (3).

(5) The articles of association may stipulate that the transfer of shares be made dependent on further conditions, in particular the company’s consent.

Information for non-professionals

To Information for legal professionals

Relevance for legal relations

a) Relevance for legal relations, frequent applications

aa) General

1Section 15 German Limited Liability Companies Act (GmbHG) is one of the central norms of the GmbHG. It makes clear in subsection I that shares in a limited liability company (GmbH) are freely transferable as a matter of principle; they can therefore especially be sold and inherited.

Section 15 III GmbHG provides that the transfer of GmbH shares between living persons is only possible if the transfer in rem is notarised. The agreement establishing a shareholder's obligation to transfer a share must also be notarised pursuant to section 15 III. This means that for a transfer of GmbH shares it is necessary for the purchaser and the vendor to seek the assistance of a notary.

Section 15 V GmbHG provides that the free transferability of shares by the shareholders of a GmbH can be restricted. This especially makes it possible for the shareholders to ensure that the GmbH shares cannot be transferred to unknown or disagreeable persons so that the group of shareholders essentially stays the same, unless the (majority of the) other shareholders give their consent.

bb) Section 15 I GmbHG: Alienability and inheritability of shares

GmbH shares are freely alienable as a matter of principle. This means that they can be transferred from one (legal or natural) person to another person. The sale of a GmbH share takes place by way of a transfer in accordance with sections 413, 398 German Civil Code (BGB). This transaction in rem must be differentiated from the transaction under the law of obligations, i.e. the legal basis for the transfer. This can be a share purchase agreement but also a gift agreement or other legal transactions under the law of obligations.

There are only a few statutory provisions which oppose a free sale, in particular in the case of freelancer GmbHs, e.g. GmbHs of lawyers or tax advisors (see section 59e I German Lawyers' Act (BRAO), section 50 I no. 1, 3 German Tax Advisors' Act (StBerG), section 52e German Patent Lawyers' Act (PAO), section 28 IV sentence 1 no. 1 German Public Accountants' Act (WPO)).

However, according to section 15 V GmbHG, the articles of association of a GmbH can make the transfer of shares dependent on further conditions (such as the company's consent or the consent of the other shareholders) or even completely exclude alienability.

In connection with the acquisition of shares, there is often talk of what are known as "share deals". A share deal refers to the complete or partial acquisition of shares in a company limited by shares (Kapitalgesesellschaft). Share deals must be differentiated from "asset deals". In the case of an asset deal, it is not the company which is being sold but the assets or individual items of assets belonging to the company (real property, plants, etc.). Section 15 GmbHG only governs share deals, i.e. the sale of GmbH shares.

GmbH shares are not only freely alienable as a matter of principle but, pursuant to section 15 I GmbHG, can also be inherited. If a shareholder of a GmbH dies, the heir becomes a shareholder or the heirs become shareholders of the GmbH. This means that the GmbH share of the testator is transferred, with all rights and obligations, to the heir. The heir does not therefore only have a right to participate in any annual net income generated but may also have obligations, e.g. to pay any outstanding claims of the company against the deceased shareholder (e.g. payment of initial or subsequent contributions). If several heirs have inherited a share in a GmbH, they are only entitled to joint ownership of the rights arising from the share, section 18 GmbHG. The heirs do not acquire independent status, e.g. where there are two heirs half each, as owners of the share in the GmbH.

The inheritability of the shares in a GmbH cannot be abrogated by provisions in the articles of association of the GmbH either. However, the articles of association can provide whether the heir will ultimately remain a shareholder. The articles of association can provide for the heir's share to be redeemed after he has become a shareholder. This means that the heir's share must be transferred to the company in return for a fee ("compensation"). The articles of association can, instead or also, require the heir's share to be transferred to a specific person, e.g. to another shareholder. A fee must be paid to the heir in this case too.

cc) Section 15 II GmbHG: Independence of shares

Today, section 15 II GmbHG only has a clarifying function because, following a change in the law in connection with the German Act to Modernise the Law on Limited Liability Companies and Combat Abuses (MoMiG) of 23.10.2008, it is now the case that a shareholder may hold not only one but, pursuant to section 5 II sentence 1 GmbHG, more than one share, even at the time when the GmbH is established.

dd) Section III and IV GmbHG: Notarisation requirement

When a share in a GmbH is being transferred, two agreements are normally concluded (although it is often the case that they are part of the same deed).

One agreement is the agreement under the law of obligations in which one of the parties undertakes to transfer the share to the other party and in which the other party undertakes to pay consideration, where appropriate (underlying legal transaction/transaction establishing an obligation). This can, for example, be a share purchase agreement or a gift agreement. Pursuant to section 15 IV sentence 1 GmbHG, the agreement under the law of obligations must be in notarial form, i.e. concluded before a notary. If, for example, a share purchase agreement for a GmbH share is concluded and this agreement is not notarised, neither of the parties can derive rights from this agreement, section 125 BGB, i.e. one party cannot request that the GmbH share be transferred to it and the other party cannot request payment of the purchase price.

In addition to the agreement under the law of obligations, there is the agreement in rem in which the parties agree that the GmbH share will be transferred from one person to the other person and which governs the transfer ("disposal transaction"). This is a transfer agreement pursuant to sections 413, 398 BGB. Pursuant to section 15 III GmbHG, this agreement in rem must also be in notarial form, i.e. concluded before a notary.

As a rule, the agreement under the law of obligations and the agreement in rem are in one document which regulates both the obligation as well as the disposal, i.e. the parties only need to go to the notary once. However, there can also be cases where the two agreements are notarised separately, e.g. if one party promises to gift a GmbH share to the other party in five years' time. In this case, the agreement under the law of obligation is first notarised and the agreement governing the disposal five years' later. In practice, this is often the case when an agreement is being concluded concerning put or call options for shares. An option grants a person the right to sell (put option) or acquire (call option) a GmbH share from its owner by way of a unilateral declaration. In such cases, the transaction establishing the obligation, i.e. the agreement concerning the put or call option, must first be notarised and the disposal transaction only when the option is exercised.

All other agreements relating to the agreements ("collateral agreements") are also subject to the requirement of notarial form pursuant to section 15 III and IV sentence 1 GmbHG. The parties must, as a matter of principle, regulate everything connected with the transfer of the share in the agreements to be notarised. The transaction concerning the disposal or the transaction establishing an obligation will be rendered invalid if the parties make further arrangements in addition to the notarised agreement, e.g. in a side letter, which relate to the transfer under the law of obligations or in rem of the GmbH share. In practice such side letters, which are often considered, must therefore be strictly warned against. If, for example, a dispute arises years later, the party for whom it is favourable to do so, can invoke invalidity.

Section 15 IV sentence 2 GmbHG is what is known as a curing provision. As already shown, the transaction establishing the obligation must be notarised. Lack of notarisation leads to invalidity as a matter of principle. If, however, this agreement is not notarised but the disposal transaction is properly notarised, the transaction establishing an obligation, which was initially invalid, becomes valid subsequently, i.e. it is cured. This serves to establish legal certainty since it avoids reversal transactions. However, the disposal transaction must be properly and fully notarised in order for the cure to be effective. If the transfer is notarised but not a collateral agreement thereto (e.g. a condition or restriction for the transfer in rem), for example, then the requirements of form for the transfer are not met and the transaction establishing the obligation is not cured.

A power of attorney to conclude the agreements in rem and under the law of obligations does not, however, need to be notarised. Instead it is valid in any form pursuant to section 167 II BGB.

Hotly disputed is the question of whether notarisation before a foreign notary meets the notarisation requirements pursuant to section 15 III, IV sentence 1 GmbHG. There is not yet a clear decision from the higher courts, especially the Federal Court of Justice, on this. On the one hand, there are good arguments in favour of notarisations, e.g. in certain Swiss cantons, being valid. However, in order to be completely certain, it is best not to have the agreements notarised abroad and to have both agreements notarised before a German notary.

ee) Section 15 GmbHG: Ways of complicating the transfer (restricted transferability)

The articles of association can provide that a transfer of GmbH shares is only possible subject to certain conditions or even completely exclude such transfers ("restricted transferability"). There are numerous ways in which the parties can restrict the free transferability.

Section 15 V GmbHG expressly mentions the consent of the company as one condition for transfer which can be regulated in the articles of association. The articles of association can set out which body or which person must grant the consent, e.g. it can provide that the consent must be granted by the company, the general meeting or even by individual shareholders. The prevailing view in legal literature is that it is even permissible for the consent to be granted by a third party external to the company.

Further possibilities include pre-emptive rights or rights of first refusal in favour of certain shareholders, obligations which must be assumed by the transferee or establishing certain characteristics which the transferee must possess (e.g. must be a relative or have certain qualifications).

Section 15 V GmbHG gives the shareholders of a GmbH the possibility of preventing persons, with whom they do not want to run a company, subsequently becoming shareholders. This is even more relevant where the group of shareholders is small and the shareholders work closely together, e.g. where the GmbH is made up of two tradesmen. By placing restrictions on the transferability of the shares they can prevent the respective other party selling his shares to an unknown third party.

If the articles of association of a GmbH provide, for example, that the shares may only be transferred with the consent of the general meeting and if a shareholder transfers his share without the consent of the general meeting to a third party (by way of a notarised agreement pursuant to section 15 III, IV sentence 1 GmbHG), the transfer is provisionally invalid. Provisional invalidity means that the transfer is not effective. However, the general meeting can also grant its consent subsequently. If it does this, the agreement becomes fully valid. If the general meeting refuses its consent, the agreement is finally invalidated.

b) The company's point of view

For the company it is especially important that it is clear who the shareholders are. The notarisation requirement provided for in section 15 III and IV sentence 1 GmbHG creates a considerable amount of transparency since, unlike in the case of shares in a stock corporation (AG), the shares cannot be simply transferred by way of a written agreement. Section 15 III and IV GmbHG is supplemented by section 40 II GmbHG which requires a notary, who has been involved in making changes to the group of shareholders, to submit a new list of shareholders to the commercial register without delay. The list of shareholders – which anyone can access at the commercial register (also online) – shows who is registered as a shareholder and who must be treated as such in legal relations.

Further information can result from the "transparency register" (sections 20 et seq. German Anti-Money Laundering Act (GwG)) introduced on 26.06.2017. As a rule, the economic beneficiaries are clear from the list of shareholders which can be inspected in the commercial register. However, notification duties may exist if the shares in a GmbH are not held directly but through other companies, e.g. an AG, if shares in a GmbH are being held in trust for a third party, where there are subholdings or where there are voting agreements between the GmbH shareholders. The directors are the persons responsible for making the notifications for GmbHs.

c) The point of view of the shareholders (majority, minority, blocking minority)

Section 15 GmbHG makes four important statements as regards the shareholders: (1) They can, in principle, freely transfer their GmbH shares pursuant to section 15 I GmbHG, providing that the articles of association do not provide for any restrictions in the sense of section 15 V GmbHG. (2) They can freely inherit their GmbH shares. (3) The transfer of GmbH shares between living persons must be notarised pursuant to sections 15 III and IV sentence 1 GmbHG. This requirement applies to both the transaction establishing the obligation as well as to the transaction in rem. (4) The shareholders can provide for restrictions of the free transferability of the shares in the articles of association in order to prevent unknown third parties becoming shareholders of the company without their consent.

d) The point of view of a company's bodies

Since section 15 GmbHG primarily concerns the level of the shareholders, the bodies of a GmbH are less significant in this connection.

A director of a GmbH has a duty, pursuant to section 40 I GmbHG, to submit a new list of shareholders to the commercial register when a change is made to the group of shareholders. If a notary has notarised the transfer, it is the notary and not the director who must make the notification in accordance with section 40 II GmbHG. The duty to submit the list of shareholders can be of significance particularly where the shareholders change as a result of legal succession and, where relevant, in the case of transfers of shares abroad. If the director of the GmbH gains knowledge of the fact that a shareholder has passed away and an heir has become a shareholder, he must give notice of this change without delay pursuant to section 40 I GmbHG by submitting a new list of shareholders to the commercial register.

The director of a GmbH can also be involved in the restrictions on transferability pursuant to section 15 V GmbHG. Sometimes articles of association of a GmbH provide that the consent of the management board of the GmbH is necessary for the transfer of a share. However, such a provision is rare in practice.

e) From the point of view of legal relations

As already explained under II., the notarisation requirement set forth in section 15 III, IV GmbHG provides an additional degree of transparency meaning that – in conjunction with the list of shareholders and the effects of the list of shareholders pursuant to section 16 GmbHG – it is usually fairly easy to see who the shareholders of a GmbH are. Section 16 GmbHG was partially reworded in connection with the MoMiG and the legislator placed additional significance on the list of shareholders. Section 16 I GmbHG sets out who, in the case of a change in the person of a shareholder or the extent of his participation in the company, is deemed a shareholder of the company in relation to it. Section 16 III even makes it possible, subject to certain conditions, to acquire shares or rights in shares from a non-authorised person in good faith.

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Information for legal professionals

1) General

a) Section 15 GmbHG: Alienability and inheritability of shares

aa) Alienability

2GmbH shares are alienable as a matter of principle.

The disposal of a GmbH share takes place by way of a transfer in accordance with sections 413, 398 German Civil Code (BGB). The transfer can be subject to a condition precedent or be for a limited period of time.Lutter/Hommelhoff/Bayer, GmbHG, 19th edition (2016), § 15 margin no. 4; Scholz/Seibt, GmbHG, 12th edition (2018), § 15 margin no. 12.  For example, it is often agreed that the transfer of a share in a GmbH only takes place once the full purchase price has been paid.

bb) Inheritability

A GmbH share is inherited to the heir on the death of the testator. The articles of association of the GmbH cannot prevent this. Unlike when shares in partnerships are inherited, the articles of association cannot provide for partial legal succession.Ulmer/Habersack/Löbbe/Löbbe, GmbHG, 2nd edition (2013), § 15 margin no. 12; Scholz/Seibt, GmbHG, 12th edition (2018), § 15 margin no. 24.  It is therefore not possible to provide in the articles of association of a GmbH for a different person to be the heir, ignoring the statutory provisions or the will. It is also not permissible to provide for shares to be automatically redeemed when the shareholder dies.

The heir immediately becomes a shareholder of the GmbH. However, as far as the relationship to the company is concerned, pursuant to sections 16 I sentence 140 GmbHG the heir only becomes a shareholder when he is entered on the list of shareholders.Michalski/Heidinger/Leible/J. Schmidt/Ebbing, GmbHG, 3rd edition (2017), § 15 margin no. 10; Scholz/Seibt, GmbHG, 12th edition (2018), § 15 margin no. 24. 

If there is more than one heir for a GmbH share, pursuant to section 18 GmbHG these heirs can only exercise the rights jointly. They are joint holders of the GmbH share.Scholz/Seibt, GmbHG, 12th edition (2018), § 15 margin no. 24; Ulmer/Habersack/Löbbe/Löbbe, GmbHG, 2nd edition (2013), § 18 margin no. 18. 

2) Definitions

a) Section 15 GmbHG: Alienability and inheritability of shares

aa) Alienability

(1) General

3GmbH shares are alienable as a matter of principle.

GmbH shares which are created in the future can also be sold. The requirement for this is that they can be defined.Lutter/Hommelhoff/Bayer, GmbHG, 19th edition (2016), § 15 margin no. 4; Scholz/Seibt, GmbHG, 12th edition (2018), § 15 margin no. 12.

3) Summary of the jurisdiction

36Federal Court of Justice, decision from 28.01.2003 - X ZR 199/99, DNotZ 2004, 152 (153) (link: https://www.jurion.de/urteile/bgh/2003-01-28/x-zr-199_99/)

Federal Court of Justice, decision from 12.11.1975, – VIII ZR 142/74, BGHZ 65, 246, 248 (link: https://www.jurion.de/urteile/bgh/1975-11-12/viii-zr-142_74/)

Federal Court of Justice, decision from 02.06.1980 – VIII ZR 64/79, NJW 1980, 2409 (link: https://www.


Footnotes