Emergency relief in shareholder disputes

The exclusion of a shareholder from a German limited liability company (GmbH) is one of the most severe measures in corporate law and can have immediate and far-reaching consequences. Once a shareholder is excluded from the shareholders' list in the commercial registry, they lose all participation and economic rights vis-à-vis the company, even if the exclusion is later proven invalid. Because proceedings on the merits often take years, interim relief is frequently the decisive battleground in shareholder disputes.

Under German corporate law, the shareholders' list (accessible in the commercial register) has a “legitimising effect” (Legitimationswirkung). This means that only a person recorded as a shareholder in the current shareholders' list is deemed, in relation to the company, to be the holder of a particular share, irrespective of the underlying substantive legal position and even where the underlying resolution is unlawful or invalid. Once removed from the list, the shareholder loses all participation and economic rights vis-à-vis the company. It is the responsibility of directors to submit an updated shareholders' list without delay once a change has occurred among the company’s shareholders.

Shareholders in a German GmbH can be excluded by way of a shareholders' resolution on the redemption of shares – that is, if permitted by the articles of association, which is typically the case. In such cases, the articles of association stipulate the requirements and the required majority for the vote. Under German corporate law, shareholders' resolutions in a GmbH are deemed valid until annulled by a court or arbitral tribunal. Such annulment or invalidity proceedings typically takes months if not years.

If a shareholder’s shares are redeemed by majority resolution, the affected shareholder risks losing their membership rights towards the company as soon as a new shareholders' list is filed with the commercial registry. This gets particularly risky for excluded shareholders in situations where the shareholders pursuing the exclusion also control the management of the company or are closely aligned with it. In these circumstances, they can direct the management to file an updated shareholders' list immediately after the shareholders' resolution on the redemption of shares. In these circumstances, proceedings on the merits alone do not provide effective protection for the affected shareholder.

A shareholder at risk of having their shares redeemed should assess their options at an early stage. One possible approach is to seek interim relief at an early stage to prevent the adoption of the resolution (e.g. by requesting an interim order prohibiting co-shareholders from voting in favour of a proposed redemption of shares).

Traditionally, German courts tend to apply strict standards to such applications, and have been reluctant to interfere with the voting behaviour of shareholders by way of interim relief.

In its decision of 16 January 2025, the Munich Higher Regional Court confirmed, in principle, that a shareholder threatened by exclusion may seek interim relief against the adoption of the resolution. 1  The court expressly rejected the position that such relief constitutes an inadmissible interference with the company’s decision-making process. The court, however, imposed strict requirements for establishing urgency. It is not sufficient for the applicant to show that no ground for their exclusion exists. Rather, the applicant must demonstrate that allowing the resolution to be adopted would result in significant and irreparable harm. This threshold will only be met in exceptional circumstances (for example, where there is a risk the shareholder concerned will not be informed of the resolution). 

In practice, an applicant will only be able to meet this threshold in a few cases. Therefore, interim relief must typically be directed against the implementation of the resolution (rather than the adoption). The implementation typically involves the filing of an amended shareholders’ list with the commercial registry.

Following the adoption of the resolution, the excluded shareholder must challenge the exclusion by way of annulment or nullity proceedings on the merits, and must secure their disputed substantive position pending the outcome of the main proceedings. This requires obtaining a preliminary injunction prohibiting the company from filing a new shareholders’ list omitting the shareholder concerned.  2  Such interim relief may be sought prior to the adoption of the shareholders’ resolution.

An amended shareholders’ list, however, can be filed within a matter of days following the resolution on the exclusion of a shareholder, which means that even expedited interim proceedings will often not provide relief in time. To avoid leaving the affected shareholder without legal protection, on 3 June 2025 the Munich Higher Regional Court ruled that the excluded shareholder may, after the filing of an amended shareholders’ list, seek interim relief ordering the company to file a corrected list reinstating the redeemed shareholder.  3

In emergency proceedings under German civil procedure, the applicant must establish – on a prima facie basis – a claim for relief (Verfügungsanspruch) and a ground for relief (i.e. urgency or Verfügungsgrund).

The claim for relief follows from the applicant’s substantive entitlement to the redeemed share. The affected shareholder must demonstrate that the exclusion is likely invalid. As in proceedings on the merits, the company must substantiate and prove that the requirements for a valid exclusion (e.g. the existence of good cause) are satisfied.

Urgency will generally follow from the above “legitimising effect” of the shareholders’ list under German corporate law and the associated risks for the shareholder concerned. At the same time, however, maintaining the status quo of the shareholders’ list despite a resolution on exclusion may also create irreversible effects to the detriment of the company and the remaining shareholders. The court must conduct a balancing of interests, weighing the consequences for the applicant, if the requested emergency relief is not granted, against the consequences for the company if the emergency relief is granted.

If the shares of a GmbH shareholder are redeemed by way of a shareholders' resolution, or if such a resolution is impending, swift action is required to secure the shareholder's rights. The key concern is that the company submits an updated shareholders' list to the commercial registry, thereby creating a fait accompli before the validity of the resolution has been established. Only in exceptional cases can interim relief be sought against the adoption of the resolution. In most cases, it is not the resolution but rather its early implementation, pending the outcome of proceedings on its validity, that risks causing irreparable harm. 

The recent case-law of the Munich Higher Regional Court confirms that shareholder exclusion disputes are often won or lost in interim proceedings. For affected shareholders, challenging the exclusion on the merits is rarely sufficient. The immediate priority is to prevent or, where necessary, reverse changes to the shareholders' list before its legitimising effect deprives them of their position within the company.