Germany Tax: Reporting and documentation requirements in mergers and divisions

A draft bill that would amend the Reorganization Act is based on previous reforms to EU law and, if enacted, would adopt the EU Directive of September 2009 regarding the reporting and documentation requirements in mergers and divisions. The draft primarily focuses on the facilitation of mergers and divisions of stock corporations and – for cross-border mergers – on partnerships limited by shares and limited liability companies. If enacted as proposed, the bill would allow certain information and documents required in preparation of the shareholder's meeting resolving on a merger or division to be forwarded electronically and no shareholder resolution adopting a merger or division would be required in the case of a 100%-owned subsidiary.

Further, the squeeze out of minority shareholders in a merger would be possible where one shareholder held a participation quota of 90% (95% participation in other cases). The draft bill still must pass the German Parliament. The EU Directive must be implemented by the Member States by 30 June 2011 at the latest.