In June 2021, the German Bundestag passed the Act Implementing the Digitalisation Directive (Gesetz zur Umsetzung der Digitalisierungsrichtlinie - hereinafter abbreviated "DiRUG"). The DiRUG, which was approved by the Bundesrat and promulgated in the Federal Law Gazette in August 2021, contains provisions enabling the online formation of limited liability companies (Gesellschaften mit beschränkter Haftung - GmbH) and certain online commercial register applications, which will enter into force on 1 August 2022. An overview of these new regulations is provided below.
I. Current legal situation
According to the current legal situation, the formation of a GmbH requires the physical appearance of the founding shareholders and the managing director(s) or their authorised representative(s) before the notary. A face-to-face procedure is currently also used for all commercial register applications.
The effective establishment of a GmbH first requires the conclusion of the articles of association in notarial form and thus its notarisation (notarielle Beurkundung). According to current law, for an effective notarial recording the deed of incorporation (the articles of association are usually an annex to this document) must be read out to the parties involved in the presence of the notary, approved and personally signed by their own hand.
In order for the GmbH to come into existence as a legal entity, it must also be entered in the commercial register (Handelsregister), which requires a corresponding application by all managing directors. This initial and all subsequent applications for entry in the commercial register of the GmbH (e.g. in the case of amendments to the articles of association and changes of managing directors) always require public certification (öffentliche Beglaubigung) in order to be effective, for which the execution or acknowledgement of the signature(s) in the presence of the notary is required under the current notarisation law. The same requirement currently exists for commercial register applications of registered sole traders (eingetragene Kaufleute - e.K.), commercial companies (e.g. stock corporations [Aktiengesellschaften – AG], limited partnerships [Kommanditgesellschaften - KG] and general partnerships [offene Handelsgesellschaften – oHG]) and branch offices (Zweigniederlassungen) registered in the commercial register.
As an alternative to these traditional face-to-face procedures, DiRUG will make it possible for the first time, within the framework and under the conditions of newly created online procedures, to carry out notarizations and certifications without the physical presence of the parties involved before the notary. The mandatory participation of notaries in the new digital forms of procedure is intended to ensure that they, as "guardians of private autonomy", can continue to fulfil their special care and advisory function in the future.
II. Online formation permitted from 1 August 2022
In deviation from the current legal situation described above, with the entry into force of the DiRUG from 1 August 2022 certain GmbH formations will be completely digitally permissible and possible by way of a notarial online notarisation procedure, so that the physical presence of the parties involved before the notarising notary will no longer be necessary.
1. Companies covered
For the time being, online notarisations will be limited to the formation of a GmbH (incl. its special form of the entrepreneurial company with limited liability (Unternehmergesellschaft (haftungsbeschränkt)). The online formation of other corporations (AG, KGaA), on the other hand, is not envisaged at the present time.
2. Restriction to the formation of GmbHs
The notarial online notarisation procedure is only open for the formation of a GmbH (i.e. notarial recording of the articles of association as well as the shareholder resolutions passed in the course of formation). Conversely, this means that subsequent measures within the GmbH that require notarisation (e.g. amendment of the articles of association, change of legal form, merger and dissolution) must still be notarised in the traditional face-to-face procedure. The same applies to the disposal of shares in a GmbH (e.g. sale and pledging of shares).
3. Restriction to cash incorporations
The admissibility of the online notarisation procedure is additionally restricted by the fact that it only covers so-called cash foundations (Bargründungen), i.e. where the nominal amounts of the shares of all founding shareholders are to be provided exclusively in cash (i.e. without contributions in kind [Sacheinlagen]). Foundations in kind (Sachgründungen), on the other hand, are excluded from the scope of the notarial online formation procedure.
4. Online model protocol formation
For the online formation of a GmbH it is also possible to make use of two additional model protocols made available by the legislator (model protocols for the formation of a one-person or multi-person company). In contrast to the existing model protocols for the (cost-privileged) simplified formation procedure, there is no limitation to three founding shareholders and one managing director for the (none-cost-privileged) online model protocol formation. Furthermore, there is an abstract rule of representation according to which if one managing director is appointed, he alone represents the company and if several managing directors are appointed, the company is represented by two managing directors together or by one managing director together with an authorised signatory (Prokurist).
5. Online commercial register application
The entry of the company in the commercial register, which is mandatory for the effective formation of a GmbH, can in future be carried out on the basis of a commercial register application of all managing directors using a notarial online certification procedure by means of video communication (see section III.).
6. Details of the online notarisation procedure
a) Video communication system of the Federal Chamber of Notaries
Online notarisation takes place by means of a real-time video conference between the notary and the parties involved. The Federal Chamber of Notaries (Bundesnotarkammer) will set up and operate a secure, manipulation-resistant and reliable video communication system for this purpose. Online notarisation via other video communication systems is not permitted under notarisation law.
b) Identification of the parties involved
A prerequisite for the use of the video communication system is the secure identification of the parties involved using a two-stage procedure.
In a first step, an electronic identification is carried out by means of an electronic proof of identity (eID), which can be provided by a German identity card with eID function (for German nationals), an eID card (for nationals of other EU/EEA member states) as well as an electronic residence permit with eID function (for nationals of third countries). German or foreign passports or ID cards of third countries (e.g. Switzerland, the United Kingdom or the USA) are not suitable means of identification in the sense of the first identification level.
Alternatively, parties involved may also identify themselves by means of an electronic means of identification issued by another EU member state if it has been certified and recognised for the purposes of cross-border authentication in accordance with Regulation (EU) No 910/2014 (eIDAS Regulation) within the framework of a corresponding notification procedure of the respective Member State and complies with the highest security level ("high") of the eIDAS Regulation.
In a second step, the notary has to compare the appearance of each party involved with their electronically transmitted photograph, unless the respective party is personally known to the notary. Before this, the photo is read from the chip of an NFC-enabled identity card or passport. The readout process is technically carried out by the video communication system (see lit. a), whereby the parties involved can use a standard smartphone with an app provided free of charge by the Federal Chamber of Notaries for the procedure as a readout device. The so-called video-ident procedure, in which an identification document is filmed by webcam for the transmission of a photograph affixed to it, is not an option for identification purposes.
c) Electronic record
As part of the notarisation of the negotiation carried out by means of video communication, the notary creates an electronic record of the negotiation instead of a document in paper form as in the traditional face-to-face procedure. This is a purely electronic document and not a paper document produced with EDP support.
In the online notarisation procedure, the notary is subject to the same duties as in the face-to-face procedure, in particular the duty to conduct the proceedings, including reading out the electronic record, to identify the parties involved and to establish their legal capacity. The other provisions on the notarial record also apply, including the provisions on the duty to verify and instruct.
The electronic record shall also be sent electronically to the parties involved for review prior to approval upon request.
d) Electronic signing of the deed of incorporation and the list of shareholders
Since a personal signature is not possible in the context of the online notarisation procedure, the electronic record must be provided with the qualified electronic signatures of the notary and all other persons who are involved in the notarisation and whose signatures are required under the German Notarisation Act (Beurkundungsgesetz). The generation of the qualified electronic (remote) signature(s) and the provision of the electronic deed with this/these signature(s) shall in turn take place via the video communication system of the Federal Chamber of Notaries (see lit. a). The notary will sign the electronic record himself using his signature card.
The list of shareholders that must be submitted to the commercial register on the occasion of the formation of the GmbH can in future also be provided by the managing director(s) with a qualified electronic signature, so that the (external) managing directors do not have to physically appear before the notary either.
e) Possibility of a "mixed notarisation”
The so-called mixed notarisation will also be permitted, whereby some of the parties involved participate in the notarisation digitally via video conference, while the other parties involved are physically present at the notary's office. In this case, in addition to the electronic record with the physically present parties involved, a record with the same content must be recorded in paper form in accordance with the current regulations of the notarisation law. However, the electronic and physical records must only be read out to the parties involved once in total by the notary.
III. Online commercial register applications permitted from 1 August 2022
From 1 August 2022, the DiRUG will also open up the possibility of submitting certain commercial register applications completely online by means of video communication, so that here too the physical presence of the persons making the application (e.g. managing directors of GmbH) before the certifying notary will no longer be necessary. A notarial online certification procedure will make it possible to publicly certify declarations drawn up in electronic form.
The scope of online certifications will initially be limited to applications for entry in the commercial register, so that applications for registration in other public registers (registers of associations, cooperatives and partnerships) will continue to be subject to the traditional notarial presence procedure.
This only includes applications for entry in the commercial register by (i) sole traders, (ii) for corporations (limited to GmbH, AG and KGaA) and (iii) for branches of domestic corporations (such as ii) or of foreign corporations governed by the law of another EU member state or EEA signatory state.
Applications for registration in the commercial register for commercial partnerships (limited partnerships [Kommanditgesellschaften - KG] and general partnerships [offene Handelsgesellschaften - oHG]) can thus not be made by way of notarial online certification, which means that the provisions on the commercial register application of a GmbH & Co. KG (KG) and its general partner (GmbH) will diverge in future.
After the Federal Government's draft DiRUG still provided for opening up the notarial online certification procedure to cooperatives (Genossenschaften) as well, the inclusion of cooperatives in the scope of this procedure was finally deleted on the recommendation of the Bundestag's legal committee.
2. Details of the online certification procedure
In legal terms, online certification is the public certification of a qualified electronic signature. From a procedural point of view, the procedure largely corresponds to the notarial online notarisation procedure outlined above. The video communication system of the Federal Chamber of Notaries must also be used for the online certification procedure and the two-stage identification provided for therein must be carried out (see II. 6.).
Upon request by the notary, an electronic document containing the declaration to be certified is provided by the party/parties involved with a qualified electronic signature assigned by the system, which is then recognised by means of video communication. The online certification is therefore based on the recognition of the signature by the party or parties involved. This is again a remote signature using the system of the Federal Chamber of Notaries (access via its free app), so that the parties involved neither need a physical signature card nor the software or hardware required to read such a card. For the online certification of a qualified electronic signature, the notary creates a simple electronic certificate.
IV. Costs of notarisation and certification in the notarial online procedure
In addition to the notarial fees stipulated in the German Law on Court and Notarial Costs (Gerichts- und Notarkostengesetz) for the notarial recording of the incorporation deed or the certification of commercial register applications, there is a flat fee for the use of the video communication system of the Federal Chamber of Notaries. This amounts to EUR 25.00 for the notarisation procedure and EUR 8.00 for the certification procedure. However, if several qualified electronic signatures are certified in a single certification certificate, the aforementioned flat fee is incurred only once.
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Advising on issues relating to corporate law and tenancy law is one of the core areas of our legal practice.
As of 1 August 2022, our notaries will also be available for online notarizations of limited liability company formations and online certifications of commercial register applications (regarding sole traders, GmbHs, AGs, KGaAs and branch offices of corporations) within the scope of their competence.