Shareholder dispute in two-tier GmbH – BGH confirms subsidiarity of the actio pro socio

published on 17 March 2025 | reading time approx. 6 minutes

German mid-sized and family-owned enterprises often have a two-tier or equal shareholder structure. However, this company structure can result in conflicting interests among shareholders, which may result in disputes and subsequent legal claims. In practice, the question then arises as to how such claims – whether those of an individual shareholder or of the company itself against the opposing shareholder – can be asserted and enforced. The situation becomes even more complex if one of the shareholders also serves as the company’s managing director or appoints the managing director of the company. This may exacerbate the disputes and the dilemma of conflicting interest between the shareholders even more.

In the common legal form of the German limited liability company (GmbH), a prior shareholder resolution regarding the assertion of the company’s claims against a managing director or a shareholder and the appointment of a special representative is required. In this case, the managing director will typically vote against any resolution that involves asserting claims against himself. This leads to the question of whether a (minority) shareholder may assert claims of the GmbH directly on behalf of the GmbH against the managing director or the other shareholder, or whether the claims can be asserted by the GmbH (possibly represented by itself) even against the consent of the majority shareholder. A recent decision (judgement of 5 November 2024 - II ZR 85/23) of the German Federal Court of Justice (Bundesgerichtshof – BGH) deals with such practice-relevant questions of shareholder disputes in a two-tier GmbH.

Facts of the case

The case decided by the BGH was based on the following simplified facts:

A GmbH (Company A) was jointly held by two shareholders, one of whom was a minority shareholder (a natural person) who held 49% of the shares in Company A, while the remaining 51% were held by another GmbH (Company B). The managing directors of Company A served as managing directors of Company B at the same time and were also (indirect) shareholders of Company B. Therefore, the managing directors of Company A were external managing directors despite the obvious proximity to the other shareholder. The minority shareholder accused the managing directors of breaches of duty, which could result in claims of Company A against its managing directors. Thus, the minority shareholder requested a shareholders' resolution in order to reach an examination of possible claims against its managing directors by a special representative on behalf of Company A. Unsurprisingly, Company B, represented by the very same managing directors, voted against this resolution. The result of the vote was not formally recorded. Consequently, the minority shareholder brought an action in his own name against the managing directors of Company A for alleged breaches of duty.

Tension between internal governance of the GmbH and effective legal protection

Generally, claims arising from breaches of duty by a managing director of a GmbH belong to the company and have to be asserted by the company itself. In order to avoid conflicts of interest and to ensure the authority of the shareholders' meeting as the supreme body of the company, a legitimising shareholder resolution regarding the decision to assert such claims and to appoint a special representative for litigation purposes is required (Section 46 no. 8 of the German Act on Limited Liability Companies (GmbHG)).

However, exceptionally a shareholder may assert claims on behalf of the company in its own name (the so-called shareholder action, or “actio pro socio”). In order to ensure effective legal protection, this individual right of action overrides the company's internal system of competences, according to which the shareholders generally decide on the assertion of claims based on the majority principle. The shareholder action is therefore subsidiary and, according to the case law of the BGH, may only be pursued by a shareholder if an action by the company is impracticable, has been thwarted by the injuring party itself or is unrealisable due to the balance of power in the company that it would be an unreasonable diversion for the shareholder concerned if he first had to force the company to bring a liability action. Thus, a shareholder action requires a specific circumstance to displace the subordination. The requirement of such an individual right of action is based in the corporate relationship as an outgrowth of the right of membership.

In German partnership law, the legislator codified the legal institution of actio pro socio as a statutory right to litigate on behalf of another in Section 715b German Civil Code (BGB) through the Act on the Modernisation of Partnership Law (Gesetz zur Modernisierung des Personengesellschaftsrechts – MoPeG).

In the context of disputes within a two-tier GmbH structure, the key question is whether a shareholder must first attempt to obtain a shareholder resolution to assert claims against a managing director even if the concerned managing director is also the other shareholder or exercises voting rights on behalf of the latter. In the event that a shareholders' resolution is deemed necessary and the result of the vote is disputed by the shareholders or the rejection of the assertion resolution was initially determined by a chairman of the meeting, the validity and the result of the resolution of the shareholders would have to be clarified in court as a first step before the assertion could take place.

No circumstances overcoming the subsidiarity of the shareholder action

The BGH decided, the minority shareholder had asserted the claims of Company A for payment to the Company A against the managing directors in his own name by way of a shareholder action. The lawsuit was unsuccessful.

Firstly, the BGH briefly reaffirmed its previous case law according to which a shareholder of a GmbH cannot in principle assert claims of the GmbH against its external managing director in his own name.

Furthermore, the court held that the prerequisites for bringing a shareholder action (action pro socio) were not met in the absence of a circumstance that would overcome the principle of subsidiarity. In particular, the BGH was convinced that the GmbH was fully capable of asserting its claims against its managing directors in court in its own name, represented by the minority shareholder. An assertion resolution pursuant to § 46 No. 8 GmbHG was not required. The majority shareholder (Company B) was subject to an exclusion of voting rights in accordance with Section 47 para. 4 GmbHG when voting on the assertion resolution. According to the fundamental principle expressed in Section 47 para. 4 GmbhG, no one may act as a judge in their own cause. However, the managing directors as representatives of Company B were personally affected by the assertion resolution. It was to be decided whether claims against them would be examined and, if necessary, pursued in court. This exclusion of voting rights based on the persons of the managing directors had an impact on Company B, as Company B was unable to exercise its voting rights free of their interests due to the representation by them. In its decision, the BGH confirmed that a shareholders' resolution pursuant to Section 46 no. 8 GmbHG is not required to assert claims in a two-tier GmbH if one of the shareholders is subject to an exclusion of voting rights. Requiring such a resolution would constitute an unnecessary formality. Apart from that, in the present case, as the BGH explicitly states, a unanimous resolution to assert claims was even passed with the votes of the minority shareholder. The votes of the majority shareholder (Company B) were null and void and not counted due to the exclusion of voting rights.

The BGH also confirmed that the exclusion of voting rights also extends to the appointment of a special representative in accordance with Section 46 no. 8 sentence 2 GmbHG. As a result, the minority shareholder was able to appoint himself as the special representative of the GmbH for a lawsuit against the management with the shareholder resolution to assert the claims.

Conclusion

The ruling by the Federal Court of Justice initially clarifies the situation in practice, namely that even after the codification of the actio pro socio in the law of partnerships (Section 715b BGB), a shareholder cannot, in principle, assert claims of the GmbH against an external managing director in his own name.

In addition, the BGH confirms the exceptional nature and subsidiarity of the actio pro socio in GmbH law. It also reaffirms its previous case law on the two-tier GmbH and the protection of its shareholders in shareholder disputes against excessive formalism by requiring shareholder resolutions despite the exclusion of the co-shareholder's voting rights. With this decision, the Federal Court of Justice is in line with its case law on the dispensability of a shareholder resolution for the subsequent submission of important reasons for dismissal in the two-tier GmbH (judgment of October 14, 1991 - II ZR 239/90).

In its decision, the BGH leaves open the question of whether the (minority) shareholder seeking to assert claims – irrespective of the dispensability of a resolution pursuant to Section 46 no. 8 GmbHG – would have had to first file an action to challenge a rejection resolution if the shareholder affected by the exclusion of voting rights had formally recorded the rejection resolution. The BGH's decision also does not clarify whether, and under what conditions, an external managing director is to be regarded as a shareholder-managing director in individual cases due to his indirect position as a shareholder, against whom a co-shareholder can also assert claims in his own name by way of a shareholder action (action pro socio).

In practice, when drawing up the company documentation, it is necessary to consider whether contractual safeguards are required to ensure the enforceability of possible future claims against an external managing director (who has an indirect interest in the GmbH). Likewise, it must be carefully considered and examined in each specific case whether a shareholder resolution is necessary before asserting claims against a managing director or shareholder, or whether an exclusion of voting rights exists which males the adoption of a resolution dispensable in the context of a two-tier GmbH.