Requirements for IPOs in Germany
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** Requirements for IPOs in Germany **
German Corporate Governance Kodex
In Germany, a dual board system is a legal requirement. It contains the following:
1. An Executive Board as the leading Institution
2. A Supervisory Board as the monitoring Institution
3. (An annual shareholder meeting as the decision-making Institution)
The Executive Board contains one or more persons (if the capital stock is more than 3 Million. the Executive Board must consist of at least two persons). The Executive Board is selected and monitored by the Supervisory Board. For example, the Supervisory Board audits the annual accounts. The Supervisory Board will be selected during the annual shareholder meeting.
The annual shareholder meeting is normally held once per year and is led by the Executive Board.
Requirements to establish an AG
1. Start-up capital of 50.000 EUR
2. A notarized Article of Association which must contain:
● The company and corporate headquarters
● Detailed information about the public limited liability company; at the industrial and commercial establishment regarding the goods and products that should be manufactured and traded.
● Amount of the company’s capital stock
● Breakdown of the capital stock in either par-value shares or no-par shares. For par-shares, the notional amount and the amount of shares of each notional amount needs to be stated. For no-par shares, the amount of shares and different classes of shares (if classes are available) need to be indicated.
● If the shares are issued in the name of the owner or the name of the company.
● The number of members of the Executive Board or the rules where the number of members is stated.–
Procedure to establish an AG:
1. Notarization Article of Association
2. Start-up capital of 50.000 EUR
3. Appointment of the necessary institutions such as the supervisory board and statutory auditor. Then the supervisory board needs to select the executive board.
4. Partial advance payment of capital to found the AG.
5. Creation of the formation report that needs to be reviewed by the executive and supervisory boards.
6. Additional review of the formation report by a third party such as an external auditor. Entry of the company name into the commercial register.