Corporate and Stock Corporation Law in Germany (Q3 2025)

Authors: Juergen Van Kann (Frankfurt, Germany)

1. Background

German stock corporation law is undergoing significant changes. In particular, new EU regulations (Listing Act, CSRD reforms), the possibility of virtual shareholders' meetings and the strengthening of shareholder rights will lead to the necessity of amendments to corporate documents. Corporations and investors must adapt their governance and reporting obligations.

Corporate law currently is dominated by ESG regulations, capital restructurings and shareholder disputes. Corporate law issues remain at the core of many transactions and financings.

2. Current Developments in Stock Corporation Law

• Virtual shareholders' meetings are now permanently permitted; articles of association should be amended accordingly; provisions on electronic communication may also be advisable.
• EU Listing Act (further details by the EU Commission still pending):
  • Exemptions from prospectus requirements for listed issuers; shorter deadlines for prospectus publication in IPOs (since 4 December 2024).
  • Simplified prospectus formats: EU follow-on prospectus for listed issuers, EU growth issuance prospectus for SMEs and issuers on SME growth markets (from 5 March 2026).
  • Standardization of prospectus disclosures and limitations on length for offerings within the EU; higher thresholds for prospectus-free small offers (from 5 June 2026).
  • Elimination of ad hoc disclosure requirements for interim steps in prolonged processes, provided confidentiality is maintained (from 5 June 2026).
  • Expanded disclosure obligations on sustainability reporting and targets; increased liability risks for ESG statements (from 5 June 2026).
• Draft CSRD Implementation Act: broader sustainability reporting requirements and external audits; increased liability exposure for board members.
• Draft Supply Chain Due Diligence Act (LkSG) amendment: elimination of reporting obligations, with sanctions only for serious violations. At the EU level, reporting obligations only for very large companies (expected threshold from 5,000 employees and over EUR 1.5 billion annual net turnover), and no earlier than 2029.
• Omnibus measures package: outcome of EU Commission's initiative to reduce sustainability obligations remains to be seen.
• Say on pay and remuneration: In an effort to strengthen shareholder influence on executive compensation, shareholders' meetings will vote on the approval of the remuneration report in the future; the shareholders' resolution will not be binding; however, non-approval may lead to reputational damage.
• Activist investors: significant increase in shareholder activism in Germany, often supported by US hedge funds. Issuers should prepare for potential disputes with activist shareholders and evaluate procedural and strategic options.

3. Current Developments in Corporate Law

• Modernization of partnership law (MoPeG, 2024):
  • Introduction of a new partnership register for civil law partnerships (GbR); registration is mandatory in the case of engagements in real estate transactions. If registered (so-called "eGbR" or "eingetragene Gesellschaft bürgerlichen Rechts"), beneficial owners must be published in the transparency register.
  • Post-exit liability of partners is limited to breaches committed prior to their departure.
  • Limitations of liability in articles are invalid vis-à-vis third parties (clarification).
  • New dispositive regime for defective resolutions in partnerships modeled according to GmbH law.
• Capital reserves and shareholder loans: tax and accounting sensitivities, particularly in real estate and fund structures.
• Shareholder disputes: increasing number of court and arbitration proceedings concerning profit distribution, exit clauses, drag-/tag-along rights.
• Corporate governance: higher transparency and ESG-compliance standards now also apply to GmbHs.

4. Key Takeaways

• Issuers should ensure that shareholders' meetings may be held digitally. Potential amendments to articles of association to be considered to ensure legal compliance. (We are pleased to advise on such matters.)
• ESG reporting in annual reports will gain even greater importance going forward. Existing reporting should be assessed for legal robustness.
• Issuers should develop strategies to adequately respond to increased shareholder influence. (Based on our international experience, we are happy to provide valuable guidance.)
• MoPeG requires amendments to partnership agreements.
• Capital and loan structures should be regularly reviewed to avoid tax pitfalls.
• Clear governance mechanisms and ESG rules should be enshrined in contracts.
• In shareholder disputes and arbitration, proper representation is crucial.
• In an international context, the expectations of global investors must be increasingly taken into account.

Jürgen van Kann, Partner - Fried Frank Frankfurt

Email: [email protected] | Tel: +49 171 7867870To read the announcement in German, click here.