In accordance with the principles of proper accounting and the provisions of the German Commercial Code (HGB), the integrity of a company’s annual financial statements is of the utmost importance.
The correct presentation of assets and liabilities in the annual financial statements is specifically specified (see Section 246 Paragraph 1 Sentence 1 and 3, Section 247 HGB).
A misstatement occurs when the financial situation as presented does not correspond to the actual circumstances as measured by specific accounting standards and the principles of proper accounting.
A key aspect of this integrity is the correct representation of a company’s equity capital, which also includes capital reserves. Capital reserves are part of a company’s equity capital (Section 266 Paragraph 3 HGB) and consist mainly of funds that were supplied to the company from outside and were not generated from profits. These reserves serve as a financial cushion and indicate that funds are permanently available to the company and are subordinate to the claims of creditors in the event of liquidation.
Misallocating funds to capital reserves when they do not meet the criteria for such classification not only distorts the company’s financial picture, but also misleads stakeholders about its solvency and creditworthiness. This misstatement can significantly affect the confidence of creditors, employees and shareholders in the company’s published financial health.
The Federal Court of Justice has dealt with this constellation and emphasized that incorrect entries in the capital reserves can constitute a criminal offense under Section 331 of the German Commercial Code (HGB) if they significantly influence the company’s annual financial statements (Federal Court of Justice, decision of May 16, 2017 – 1 StR 306/16) . The court also points out that not every violation of accounting rules gives rise to criminal liability; the violation must be serious enough to harm the interests of the company’s stakeholders. This in turn also offers scope for effective criminal defense of the company concerned.
This article does not represent specific and individual legal advice, but rather only provides a rough initial overview of the very complex legal matter described. You can only obtain legal certainty for your specific case constellation through coordinated examination and advice from an expert lawyer.
I would be happy to assist you as a lawyer and specialist lawyer for a legal assessment and assessment of your case and represent your interests assertively and resolutely. the management, suppliers, the D&O insurance, the (co-)shareholders and the investigative authorities. Please feel free to contact me by phone or write to me.
I advise nationwide on site or via Zoom as a specialist lawyer in the legal areas of corporate law, tax law and insolvency law, especially in the cities and metropolitan areas around Stuttgart, Heilbronn, Karlsruhe, Freiburg, Ulm, Augsburg, Munich, Frankfurt, Wiesbaden, Saarbrücken, Kaiserslautern, Bonn, Wuppertal, Duisburg, Nuremberg, Münster, Saarbrücken, Düsseldorf, Cologne, Dortmund, Hanover, Kassel, Leipzig, Dresden, Bremen, Hamburg and Berlin.
#Accountingcriminal law §331HGB #Commercial criminal law #DistortionEquity #Capital reserve #Specialized lawyerCorporate law #Specialized lawyerCommercial law #Specialized lawyerTax law #Specialized lawyerInsolvency law #Lawyer #Attorney #Specialist #Specialized lawyer
#unpleasant #consequences #incorrectly #reported #capital #reserve #accounting #offense #Section #German #Commercial #Code #HGB
