The hurdles of interim legal protection for shareholder lists – and how to overcome them

It is true that the acquisition of a share is already completed with the transfer of the share. However, according to § 16 Para. 1 German Limited Liability Company Act (GmbHG), in the event of a change in the persons of the shareholders or the extent of their shareholding, only those persons who are entered as such in the list of shareholders recorded in the commercial register are deemed to be the owners of the share(s). The person concerned therefore has a considerable interest in having their share entered in the list of shareholders as quickly as possible.

In a recent decision of 22 November 2023 (case no. 7 W 117/23), the Higher Regional Court of Brandenburg rejects the issuance of an interim injunction for the submission of a new list of shareholders.  Reason enough to take a closer look at the strict requirements for interim legal protection.

I. The decision of the OLG Brandenburg

In the case to be decided, the applicant was entered in the list of shareholders in the commercial register as the holder of a share. He now sought an interim injunction to oblige the Ltd. (GmbH) to submit a new list of shareholders to the commercial register, taking into account an additionally acquired share. The application was unsuccessful. In the opinion of the Higher Regional Court of Brandenburg, there were no grounds for an injunction. The submission of an updated list of shareholders meant an anticipation of the main proceedings. However, the applicant was unable to demonstrate that his rights would be impaired without the submission of an updated list of shareholders and that subsequent legal protection to safeguard his rights would not be possible.

II. Proposed solutions for the presentation of a reason for the injunction

The applicant sought interim relief for the submission of a new list of shareholders. These proceedings are demanding due to the anticipation of the main proceedings – the list of shareholders has been filed. The applicant must not only justify why only the filing of an amended list of shareholders can protect his rights. He must also explain how this „new“ list of shareholders can be removed from the commercial register if it is decided against the applicant in the main proceedings that no new list of shareholders is to be filed in the commercial register.

The approach is to provisionally secure the applicant’s rights to information, participation and involvement. Information rights may be jeopardised if the applicant can demonstrate that he/she is not aware of all intended shareholder resolutions. Subsequently, the rights of participation and involvement are jeopardised if the person concerned does not receive an invitation to the shareholder resolutions or is denied participation in any other way. In addition, a specific threat may arise from the behaviour of the person wrongly registered as a shareholder. There is also a concrete threat if the wrongly registered shareholder, together with other shareholders, outvotes the applicant in important matters.

What can a new shareholder do?

The aforementioned reasons are possible the “best way” to declare for a purchaser of a share who has not previously held a stake in the company. They can justify that their rights to information, participation and involvement are being encroached upon if an amended list of shareholders is not filed. In the absence of an entry in the list of shareholders, the company is prohibited from inviting such a potential shareholder to the shareholders‘ meeting. Nevertheless, such an application remains challenging.

What can a purchaser who is not yet a shareholder do?

It is even more difficult for an applicant who is already a shareholder of the company. As a shareholder, they are invited to the shareholders‘ meetings and can also exercise their voting rights. In this respect, an acquisition would be conceivable in order to be able to assert minority rights (shareholding of 10% or more in the share capital), to obtain a blocking minority in order to prevent shareholder resolutions or even the majority of votes. In the latter case, however, the applicant must also demonstrate that the other shareholders will attempt to pass resolutions against the will of the applicant.

Completely different approach!

An alternative is a temporary injunction against the „shareholder“ to not exercise the rights from the share. In such a case, the applicant must also demonstrate the grounds for the injunction. It would be conceivable to deny such a shareholder the exercise of voting rights in order to prevent resolutions against the will of the applicant. In this respect, too, the stakes are high. As a rule, a shareholder cannot be denied participation or the exercise of voting rights prior to a shareholders‘ meeting. The applicant must therefore present concrete circumstances that the majority of shareholders wish to adopt resolutions „improperly“ against the will and possibly to the detriment of the applicant.

III. Conclusion

The „battle for the list of shareholders“ is often decisive for the success or failure of shareholder disputes. In preliminary injunction proceedings, the presentation of the reason for the injunction – the impairment of the applicant’s rights – is decisive.

The author of this article will be happy to assist you in matters of interim legal protection and help you to assert your interests in the proceedings.

Autoren: Dr. Andreas Menkel, Constantin Dorschu