For as a rule, in order to enforce claims for damages belonging to the GmbH against its managing director, section 46 no. 8 of the German Limited Liability Companies Act (GmbHG) requires a resolution of the shareholders’ meeting approving such enforcement; this resolution is a substantive prerequisite for bringing the claim. If the necessary resolution to pursue the claim for damages is not in place, any action brought for that purpose must be dismissed as unfounded.
In practice, the majority shareholder will regularly attempt to obstruct the enforcement of claims for damages by voting against such enforcement when the resolution is put to the shareholders’ meeting. In these cases, the result of the vote remains at best inconclusive if the chair of the meeting refrains from formally recording a resolution. If, however, he records a resolution rejecting the enforcement of claims, the minority shareholder must contest this by means of an action for annulment combined with an action for declaratory judgment, subject to strict time limits.
In both situations, the enforcement of claims for damages is associated with additional effort and, in any case, with delay for the minority shareholder. This raises the question whether the minority shareholder may pursue the claims in his own name for the benefit of the company (the so-called “actio pro socio”).
The German Federal Court of Justice (BGH), in its judgment of 5 November 2024 (II ZR 85/23), rejected this possibility but confirmed for the minority shareholder a more effective way of bringing the claims in the name of the company.
Thus, the BGH confirmed in its decision that a shareholders’ resolution pursuant to section 46 no. 8 GmbHG is not required whenever the other shareholder is subject to a voting prohibition under section 47(4) GmbHG, since otherwise he would be “judge in his own cause”. This applies not only where a claim is to be brought directly against the shareholder personally, but also where his legal representatives are concerned.
By this ruling, the BGH has now clarified that no shareholders’ resolution is needed to enforce claims for damages against managing directors if the other shareholder is prohibited from voting on the decision. According to the BGH, this is to be affirmed not only where claims are to be enforced directly against the majority shareholder in his role as managing director, but also where the governing bodies of the majority shareholder themselves are to vote on the enforcement of claims directed against them in the company in which they hold shares.
The minority shareholder may instead act directly as the company’s litigation representative – or appoint a representative – and bring the claims at the company’s expense. However, if it subsequently emerges that the minority shareholder was not entitled to bring proceedings in the company’s name because the other shareholder was not, in fact, subject to a voting prohibition, or if the claim (for any other reason) proves unfounded, the minority shareholder risks being exposed to a recourse claim by the company.
The question whether, in the specific case, the majority shareholder is subject to a voting prohibition must therefore be examined carefully on an individual basis, particularly as the majority shareholder is said to be entitled to appoint an impartial representative to safeguard his voting right.