In a ruling issued by the Higher Regional Court of Düsseldorf (Case No. 3 Wx 133/24) on September 3, 2024, important aspects concerning the registration of a GmbH in the commercial register were clarified, particularly regarding the requirements for the corporate purpose. This article explores the decision and explains what founders should consider when drafting their articles of association to avoid potential obstacles to registration in the commercial register.
Facts and Decision
The GmbH in formation (hereinafter referred to as „the entity“) had applied for its registration in the commercial register. However, the District Court of Düsseldorf rejected the registration, stating that the corporate purpose was not sufficiently specified. The articles of association only mentioned „trade in goods of all kinds“ and „brokerage of all kinds of transactions.“ The District Court criticized these formulations as being too general and not providing adequate individualization of the intended business activity. It was also pointed out that an expansion of the corporate purpose through an amendment to the articles of association on March 25, 2024, had not been properly submitted for registration.
The entity’s appeal against this decision was dismissed by the Higher Regional Court of Düsseldorf. The registration in the commercial register was still denied, as the formulations of the corporate purpose did not meet the requirements of Section 3(1) No. 2 of the GmbH Act (GmbHG).
Requirements for the Corporate Purpose
The Higher Regional Court of Düsseldorf based its decision on the provisions of Section 3(1) No. 2 of the GmbHG, which requires a clear and precise description of the corporate purpose. This must clearly specify the scope and type of the intended business activities. General descriptions such as „trade in goods of all kinds“ or „brokerage of all kinds of transactions“ are generally considered insufficient.
The court reasoned that such vague formulations would not allow the commercial register or interested parties to understand the actual business activities of the GmbH. Such a description would essentially undermine the provision of Section 3(1) No. 2 of the GmbHG and could result in the company failing to adequately define its corporate purpose in the articles of association. The Higher Regional Court emphasized that the company must specify its corporate purpose in the articles of association to clearly present the intended activities to interested third parties.
Exception: Very Broad Business Areas
However, the court acknowledged that, in exceptional cases, such a general description could be acceptable if the company’s business area is so broad that no specific focus can be identified. In these cases, the formulation „trade in goods of all kinds“ or „brokerage of all kinds of transactions“ could be permissible if the company intends to operate in a very broad field of activity without a clear focus.
In such cases, however, the articles of association must include a detailed and justifiable explanation as to why it is not possible to focus the business activities and that the company truly intends to operate in all the mentioned areas without limitation. However, this was not the case here.
Practical Consequences
For businesses and their founders, this decision means that they must ensure that the corporate purpose is defined as concretely and precisely as possible. A vague formulation such as „trade in goods of all kinds“ is usually not sufficient and could lead to a rejection of the registration application.
The company must either specify its corporate purpose or clarify that it intends to operate in a broad business field without a specific focus. Therefore, founders should carefully consider how they define their business activities in advance and seek legal advice if necessary to ensure that the articles of association comply with the GmbHG’s requirements and that registration in the commercial register can proceed smoothly.
Conclusion
The decision of the Higher Regional Court of Düsseldorf highlights the importance of a precise and detailed formulation of the corporate purpose in the articles of association of a GmbH. Founders should avoid using general and vague descriptions to prevent later problems with the commercial register registration. If a broad formulation of the corporate purpose is desired, it is essential to justify this adequately in the articles of association.
Anyone founding a GmbH should therefore carefully and precisely define the corporate purpose to ensure that it complies with legal requirements and that the registration in the commercial register can proceed successfully.
Note: This text does not claim to be exhaustive and does not constitute legal advice. Advice will be provided on a case-by-case basis after examining the specific circumstances from a legal perspective.
If you require legal advice on these or other legal matters, please feel free to contact Mr. Attorney Eugen Balin, LL.M., via email at info@balin-legal.de.
