Obligation to File for Insolvency Suspended
Generally, managing directors of a German limited liability company are under a strict duty to file for insolvency if the company becomes insolvent or over-indebted (see question 12 below). This statutory filing obligation is suspended until 30 September 2020, and the suspension may be extended until the end of March 2021. Only where the insolvency is not a consequence of the COVID-19 pandemic, or where there are no prospects of remedying the insolvency, the filing obligations remain intact.
As a consequence of the suspension, payments made by the company in the ordinary course of business during insolvency or over-indebtedness – which generally are forbidden and give rise to personal liability of the director (see question 13 below) – may be permissible.
Filing of Annual Accounts
While the statutory deadlines for submitting and publishing annual financial statements have not been changed, the authority in charge of enforcing these obligations has decided on several measures to relieve the burden on companies that have not yet been able to submit their annual financial statements on time. Where capital market-oriented companies have not filed their 2019 annual financial statements until the deadline regularly expiring on 30 April 2020, no administrative fine proceedings will be initiated before 1 July 2020.
Directors are generally obliged to call for an ordinary shareholders’ meeting in order to, inter alia, resolve on the annual financial statements and the distribution of the company’s results. However, holding shareholders’ meetings as physical meetings may be difficult or even illegal. During 2020, resolutions of the shareholders may also be passed in text form or by written vote even if such alternative is not provided for in the company’s articles of association.