Transactions of Russian joint stock companies and limited liability companies require the consent of the general meeting or the board of directors if they qualify as material or interested party transactions. As the non-observance of the relevant requirements may be grounds for contesting these types of transaction, they should be observed not only by shareholders and members of the corporate bodies of the respective companies, but also by persons that wish to enter into such transactions with these companies.
The Bochum Regional Court recently looked at whether a franchisee's contractual obligation to operate a business can be enforced by way of an interim injunction. To grant an interim injunction to enforce the obligation to keep the business open, it must be demonstrated that the franchisor faces serious losses at least equivalent to a threat to its survival or to drawbacks that cannot later be remedied.
The operation of energy plants usually means securing the required land long term by way of a use agreement. Prematurely ending a use agreement can substantially reduce the profitability of investments in energy plants. Defects in the written form of use agreements therefore constitute a risk for such investments. However, the Federal Court of Justice has decided that written form remedy clauses are invalid and do not prevent a contracting party from terminating a use agreement by invoking a written form defect.
The Federal Court of Justice recently ruled that an authorised dealer, such as a franchisee, has no compensation claim in analogous application of the regulation governing sales representatives contained in the Commercial Code if the franchisor is contractually obliged to block the customer data provided to it by the franchisee, to discontinue using it and to delete it at the request of the sales intermediary when the contract is terminated.
Parliament recently passed a law revising the safeguarding of secrecy where third parties are involved in the exercise of professional duties by persons with a duty of confidentiality. The legislature responded to calls for a long-overdue reform and finally updated the criminal rules on secrecy for certain professionals. For the healthcare sector, this reform opens up a number of new opportunities for using the services of external service providers without facing the risk of criminal liability.
A landlord can terminate a rental agreement for residential premises if he or she has a justified interest in ending the lease. Two recent Federal Court of Justice decisions provide clarification regarding a landlord's needs as grounds for termination. While the change in case law regarding the legal consequences of a breach of the duty to offer is welcome, the judgments also show that there is no one-size-fits-all answer to the question of whether termination due to a landlord's needs can be declared valid.
The Supreme Court recently clarified parties' right to terminate a contract unilaterally (ie, the 'right to unilateral refusal of performance' in Russian terminology) or amend a contractual obligation unilaterally. The court also clarified the requirements regarding the fulfilment of payment obligations, including with regard to bank transfers, currencies and interest in the event of a default, among other things.
Russian law continues to develop with respect to the disclosure of beneficial owners of Russian businesses. New provisions came into force at the end of 2016, which require all Russian legal entities to take reasonable and available steps to identify their beneficial owners and disclose them on request, among other things. For this purpose, the law expressly entitles a Russian legal entity to request information from its shareholders, as well as from other persons who in any way control the entity.
The Federal Court of Justice recently criticised a franchising advertising flyer in terms of competition law. One interpretation of this judgment is that it makes the advertising of franchise systems significantly more difficult. However, this point of view does not ultimately do justice to the decision, as the judgment does not fundamentally question the typical advertising of franchise systems.
The statutory deadline for holding the annual general meeting of a Russian limited liability company (LLC) is April 30 2017. The meeting must approve the annual results of the LLC's activities – in particular, its annual financial statements as of December 31 2016 and its 2016 annual report. Violation of the deadline or any formal requirements may result in administrative fines. The deadline for holding the annual general meeting of a Russian joint stock company is June 30 2017.
A residential landlord's right to compensation for use against a tenant who has been given notice of termination but not vacated the property in time is often of concern if the landlord demands compensation to the value of the rent customarily paid in the area. Until now, how to calculate this compensation precisely has been unclear. A recent Federal Court of Justice case has created legal certainty for those applying the law and has strengthened the interests of landlords.
A Brandenburg Higher Regional Court decision regarding the payment of franchise and marketing fees in arrears shows the importance of a substantiated presentation of a claim, as well as the importance of accurate, transparent and comprehensible billing by franchisors. The court could not ascertain whether there were unpaid franchise or marketing fees, as the franchisor failed to present sufficient facts demonstrating the exact amount of the franchise and marketing fees in the respective timeframes.
The Federal Fiscal Court recently clarified previously disputed issues on whether the lease of a shopping centre qualified as trade income or income from property administration. Surprisingly, the court also decided that marketing measures conducted by a centre manager are not detrimental for trade tax purposes, giving real estate investors much more flexibility for existing and future real estate investments in terms of ring-fencing trade tax exposures.
The sale of German real estate by companies or natural persons based outside Germany was recently made more difficult by the fact that the German tax authorities have obliged buyers to withhold and pay a lump sum of up to 25% of the purchase price for the account of the seller to secure the income tax incurred on the purchase price. This tax deduction can lead to the transaction failing if the purchase price is insufficient to cover both the seller's financing and the lump-sum tax deduction.
In March 2015 and July 2016 amendments to the Civil Code were introduced regarding compensation for damages and contractual penalties. In March 2016 the Supreme Court provided its interpretation of the March 2015 amendments. Together, they should make damages claims easier to assert, clarify the limitations of liability, define the criteria for the reduction of penalties and establish contractual means of protecting creditors against loss and damages.
Amendments to the Federal Law on Joint Stock Companies recently came into effect, allowing shareholders to finance joint stock companies (JSCs) safely by means of so-called 'contributions to assets'. Voluntary contributions can be made via an agreement between the relevant shareholder and the JSC. Alternatively, a non-public JSC's articles of association can stipulate that the shareholders' meeting can impose an obligation on shareholders to make contributions.
The Federal Supreme Court recently ruled that a franchisor's supplement containing prices stipulated as being "non-binding recommendations" obtainable only "in participating markets" constituted an act of unfair competition as the disclaimer was insufficient. The judgment raises questions about disclaimers, franchisor advertising obligations and whether franchisors are prohibited from enlisting franchisees to participate in a promotion.
The statutory deadline for holding the annual general meeting of a Russian limited liability company (LLC) will expire on April 30 2016. The annual meeting must approve the annual results of the LLC's activities – in particular, the annual financial statements and the annual report of the LLC as of December 31 2015. Violations of the deadline or the formal requirements may result in significant administrative fines.
Sometimes a franchisee can no longer pay some or all of the price of goods purchased from the franchisor, the rent for the premises or the franchise fees. Deferrals or instalment agreements may be among the solutions. But what happens if the concessions of the franchisor or the efforts of the parties are inadequate and the franchisee falls into insolvency?
The Federal Law on Limited Liability Companies was recently amended. Among other things, a share in a limited liability company can now be alienated in order to exercise the option to conclude a contract by way of separate notarisation of the irrevocable offer and subsequent notarisation of the acceptance. The timeframe in which share pledge agreements must be filed with the registering authority has also been shortened.