Close Corporations — Reforming Private Company Law: European and International Perspectives

Abstract

A reform of the GmbH is underway. The appearance of branches of British private limited companies in Germany in the aftermath of the Inspire Art judgment had a certain impact on the reform discussion. Which strategy should be chosen? The so-called MoMiG reform has decided: let’s face the competition. The reform aims to make the incorporation of a GmbH much quicker, easier and cheaper. It seeks to deregulate some of the complications in German law, such as contributions in kind, capital maintenance and cash pooling and rules on shareholder loans, that are difficult to understand. It will also reduce minimum capital requirements. Furthermore, the intended strategy is to modernise the company law we have and not to introduce even more and new forms of companies into our law. The MoMiG Act should reach the German Parliament in the spring of 2007 and will hopefully enter into force at the beginning of 2008.