Understanding Sub-Balance Sheet Liability in GmbH i.G: Prerequisites, Nature, and Scope

Title: Understanding Sub-Balance Sheet Liability in GmbH: A Comprehensive Overview

Subtitle: The underestimated danger for shareholders

Introduction:
The legal institution of sub-balance sheet liability in GmbH (Gesellschaft mit beschränkter Haftung) has gained significant importance with the lifting of the ban on prior encumbrance. This article aims to provide a comprehensive overview of sub-balance sheet liability, its nature, scope, and the prerequisites for its creation.

1. The Legal Institution of Sub-Balance Sheet Liability:
With the abolition of the ban on prior encumbrance, a GmbH in the process of being founded (i.G.) can now commence its general business activities during the founding phase. However, this can lead to a situation where the share capital is insufficient to cover the already established liabilities. To address this issue, the Federal Court of Justice (BGH) introduced the legal institution of sub-balance sheet liability. It serves as compensation for the lifting of the ban on prior encumbrance and is considered pure internal liability. The claim from sub-balance sheet liability can only be asserted by the company and not by contractual partners directly against the shareholders.

2. Prerequisites for the Creation of Sub-Balance Sheet Liability:
For sub-balance sheet liability to be triggered, it is necessary to establish liabilities that exceed the amount of the paid-up share capital. Additionally, the shareholders of the GmbH must have agreed to the start of business. The liability also extends to shareholders who join the company subsequently. At the time of entry in the commercial register, the assets must be at least equal to the share capital. If this requirement is not met, sub-balance sheet liability is triggered.

3. Nature and Scope of Liability:
Shareholders of the GmbH are liable for the difference between justified liabilities at the time of entry in the commercial register and the paid-up share capital. The liability is proportional to the respective share of the shareholder. Shareholders who entered the company before it was entered in the commercial register are also pro rata liable.

Conclusion:
Sub-balance sheet liability in GmbH is a crucial legal concept that protects the interests of creditors and ensures the financial stability of the company. Shareholders must be aware of their potential liability and the prerequisites for its creation. It is important to seek legal advice to fully understand the complexities of sub-balance sheet liability and its implications for the company and its shareholders.

Disclaimer:
This article provides a general overview of sub-balance sheet liability in GmbH and should not be considered as individual legal advice. For specific cases, it is recommended to consult a competent lawyer to obtain legal certainty and tailored advice.

About the Author:
[Insert author’s name] is a lawyer and specialist lawyer in corporate law, tax law, and insolvency law. With nationwide availability, they offer legal assessments and representation for various legal matters, including sub-balance sheet liability, in cities and metropolitan areas across Germany.

Keywords: GmbH, Corporate Law, Partnership, Managing Director Liability, Foundation Phases, GmbHi.G., Pre-company, Pre-founding company, Full company, Sub-balance sheet liability, Loss coverage liability, unechtGmbH, unechtVorgesellschaft, Gesamtkreditnerhaftung, Handelnendhaftung, Partner dispute, Specialist lawyerCorporate law, Specialist lawyerCommercial law, Specialist lawyerTax law, Specialist lawyerInsolvency law, Lawyer, Specialist.

What are the potential dangers and financial consequences faced by shareholders in the event of sub-balance sheet liability being enforced due to insolvency or financial difficulties

Alance sheet liability cannot be created.

3. Nature and Scope of Sub-Balance Sheet Liability:

Sub-balance sheet liability is characterized by its internal nature, meaning that it is a liability of the company and not directly of the shareholders. This means that contractual partners cannot assert their claims directly against the shareholders but must pursue them through the company. In the event of insolvency, sub-balance sheet liability can only be enforced if all other assets of the company have been exhausted.

The scope of sub-balance sheet liability includes all liabilities that have been established during the founding phase and prior to the entry in the commercial register. These liabilities can include contractual obligations, debts, or any other legal obligations undertaken by the company. Shareholders who have agreed to the start of business, as well as those who join the company subsequently, share the liability in proportion to their ownership shares.

4. The Underestimated Danger for Shareholders:

Sub-balance sheet liability poses a potential danger for shareholders as it exposes them to additional liabilities beyond the share capital they have already contributed. If the company faces financial difficulties or becomes insolvent, shareholders may be held personally liable for the debts and obligations of the company. This can have significant financial consequences for shareholders, as they may have to use their personal assets to satisfy the claims of creditors.

Conclusion:

Understanding sub-balance sheet liability in GmbH is crucial for shareholders and stakeholders involved in the founding and operation of a GmbH. It is a legal institution that addresses the issue of insufficient share capital during the founding phase but also exposes shareholders to additional liabilities. By being aware of the nature, prerequisites, and scope of sub-balance sheet liability, shareholders can make informed decisions and take appropriate measures to mitigate potential risks.