GER: Voting Bans in GbR Partnerships

May 19, 2023 Benn-Ibler Rechtsanwälte

When does a partner in a German civil law partnership (Gesellschaft bürgerlichen Rechts, hereinafter GbR) lose their voting rights due to a conflict of interest? This is the question that the German Federal Supreme Court (Bundesgerichtshof, hereinafter BGH) was recently required to decide.

As far as the question above is concerned, there are regulations for German limited liability companies (Gesellschaft mit beschränkter Haftung, or GmbH) and joint-stock companies (Aktiengesellschaft, or AG). This is not true, however, in partnership law. Here, a different but generally applicable principle must serve as a resort to answer that question.

In the case at hand, action was brought by a shareholder and sole managing director of an Italian company whose business purpose is the production and sale of spectacles. In addition, together with the two defendants, the plaintiff is a one-third shareholder in a German GbR which sells the manufactured spectacles under a trademark registered in Germany. By means of a licence agreement, the Italian company was permitted to market the products on its own under a trademark. In the course of their business dealings and in breach of contract, the plaintiff used the registered trademark for his Italian company. As a result, the licence agreement was terminated by the two defendant partners via a letter from their lawyer, and the use of the trademark was prohibited. The plaintiff claimed that the termination of the licence agreement was invalid because no valid shareholders’ resolution had been passed. Any implied resolution was ineffective due to his lack of participation.

In the BGH’s view, the licence agreement had not been effectively terminated. Although there was an implied shareholders’ resolution (as the plaintiff was banned from voting), the plaintiff as a shareholder would still have had to been included in the decision-making process.

The shareholders’ resolution was defective because the plaintiff had not been part of adopting the resolution. A shareholder loses their right to vote and is subject to a voting ban insofar as a shareholder resolution is aimed at disapproving of the conduct of a shareholder. According to the BGH, the generally applicable principle that no one may be a judge in their own cause applies in partnership law as well. However, the BGH emphasised that despite the ban on the shareholder’s voting right, the shareholders’ resolution was nevertheless invalid. By virtue of being a shareholder, even a shareholder subject to a voting ban still has the right to participate in the formation of the company’s intentions.

BGH, II ZR 76/21 (17.01.2023)