Shareholder Dispute: The 10 Sharpest Swords for Attack and Defense

A strategy paper from practical experience: Whether in a family-owned GmbH, an established KG, or a GbR among professionals – when partners become opponents, it is not just who is right that counts, but who enforces their rights with greater tactical intelligence. This means that often it is not the substantive legal situation alone that decides, but the procedural and formal tactical design.

At the center is almost always the shareholders' meeting and the validity of resolutions. Below, the essential procedural and corporate law instruments for the conflicting parties are presented.

Since January 1, 2024, we must also observe the new rules of the German MoPeG (Act on the Modernization of Partnership Law).

The 5 Most Effective Means of Attack

If a shareholder or a shareholder group wants to bring about a change in the status quo – such as the dismissal of a managing director or the exclusion of a co-shareholder – the following instruments are available.

1. Interim Legal Protection to Secure Decision-Making

Since ordinary court proceedings often take years, interim legal protection is the tool of choice to create facts.

• Voting Prohibitions: To prevent an affected shareholder from voting against their own dismissal or special audit, an interim injunction can be applied for in advance, prohibiting them from voting. This ensures a clear resolution result and prevents a stalemate.
• Access Bans: Parallel to the dismissal, a managing director can be prohibited from entering the business premises and accessing accounts by interim injunction to secure evidence and avert further damage.

2. Preparing the "Important Reason" through a Special Audit

The exclusion of a shareholder or the summary termination of a managing director's employment contract requires an "important reason." Mere suspicions are not enough in court.

• Procedure: Before the actual measure, it is recommended in the case of a German GmbH to enforce a special audit (analogous to Section 142 of the German Stock Corporation Act (AktG)).
• Effect: The affected shareholder is often subject to a voting prohibition here. The report of a neutral auditor provides the necessary density of evidence (e.g., in the case of expense fraud or transactions outside of authority) to make subsequent lawsuits "court-proof."

3. Tactical Design of the Agenda ("Pushing Through")

Surprise moments in the shareholders' meeting can be decisive for the process. Unless the articles of association provide for longer periods, it is generally sufficient to announce agenda items up to three days before the meeting ("pushing through agenda items").

This limits the reaction time of the opposing side. It becomes more difficult to obtain qualified advice in time or to prepare counter-motions.

4. Utilization of Meeting Chairmanship and Resolution Determination

In the German GmbH and commercial partnerships, the person of the meeting chairman plays a key role. If the chairman formally determines the result of a resolution, this resolution is provisionally effective, even if it should be substantively flawed.

The defeated shareholder is then forced to actively file an action for annulment to remove the determination effect. The burden of initiative and the litigation risk are thus shifted to the opponent.

5. Utilization of the Legitimation Effect of the Shareholder List (GmbH)

When redeeming a business share in the German GmbH, the correction of the shareholder list in the Commercial Register (Section 16 of the German GmbHG) is the sharpest sword. After the redemption resolution has been passed, the managing directors submit an updated list to the commercial register in which the person concerned is no longer listed.

With the inclusion of the list, the person concerned formally no longer counts as a shareholder. They are deprived of information and participation rights long before a court has decided on the legality of the redemption.

The 5 Most Effective Means of Defense

If a shareholder is confronted with coercive measures, various defensive and offensive defense mechanisms are available.

1. The Counter-Attack ("Stalemate Situation")

Particularly in two-person companies, the reciprocal raising of allegations is an effective means of defense. If shareholder A applies for the dismissal of shareholder B for good cause, B can mirrors-likely pursue the dismissal of A.

If both sides cite important reasons, a legal stalemate often arises. Courts then tend not to exclude either of the two unilaterally, but to consider the dissolution of the company. This risk often forces the parties into an amicable settlement (comparison).

2. The Plea of Arbitration (Section 1032 ZPO)

Many articles of association contain arbitration clauses that are overlooked in the heat of the moment. If a lawsuit is filed before a state court although an arbitration clause exists, this must be reprimanded before the start of the oral hearing on the merits.

The state lawsuit is dismissed as inadmissible. The plaintiff loses time and must initiate an often costly arbitration process anew. If deadlines (e.g., the one-month period for rescission actions) were missed, the attacked resolution can become final.

3. Register Blockade and Protective Briefs

To prevent the creation of accomplished facts in the Commercial Register (e.g., deletion as managing director), preventive action is required.

• Notification to the Register Court: The register court should be informed immediately about the challenge of a resolution. According to Sections 381, 21 of the German FamFG, the court can suspend the entry until the legal situation is clarified.
• Protective Brief: To prevent the issuance of an interim injunction against one's own person without an oral hearing, it is recommended to file a protective brief (Schutzschrift) with the central protective brief register.

4. Participation and Voting Despite Prohibition

A common mistake of affected shareholders is to stay away from the meeting or to abstain from voting if the opposing side asserts a voting prohibition. One should always participate in the meeting and vote against the resolution – even if the meeting chairman disputes the right to vote.

The ignored counter-vote leads to unclear majority ratios in the protocol or an incorrect determination of the resolution. This significantly facilitates subsequent judicial challenge.

5. Formal Reprimands (Defects in Convocation)

Resolutions in shareholders' meetings are often attackable because of formal errors. Were invitation periods exactly calculated? Was the invitation issued by the responsible person? Was the form (often registered mail) observed?

Such defects must be reprimanded in the meeting. At the same time, it should be stated that one could not prepare sufficiently due to the defect (e.g., period too short). This generally leads to the contestability or nullity of the resolutions passed.

Conclusion: The Goal is the Solution, Not the Judgment

Despite the large number of means of attack and defense, practice shows that very few shareholder disputes are pacified by a final judgment. The state courts are obliged under Section 278 of the German ZPO to work towards an amicable settlement at every stage of the proceedings.

The legal instruments presented therefore serve primarily to build a negotiation tactical position. The goal is often not to win the process, but to achieve an economically advantageous separation or reorganization of the circumstances by way of a settlement through legal pressure. Due to the complexity and the threat to the existence of the company, early strategic planning including current case law is essential.