| Topic | LLC | FlexCo |
|---|---|---|
| Ordinary capital increase (generally 3/4 majority) | Yes | Yes |
| Authorisation of managing directors to increase capital (“authorised capital”) | No | Yes |
| “Conditional capital” for: – granting conversion and subscription rights to creditors of financing instruments – preparing a business combination – granting share options to employees, senior staff, managing directors and supervisory board members |
No | Yes |
| “Authorised conditional capital” | No | Yes, to service share options for employees, senior staff and managing directors |
| Issuance of convertible loans / convertible bonds | Not possible (only substitute structures requiring consent/obligations of individual shareholders) | Possible; requires a shareholders’ resolution with 3/4 majority |
| Acquisition and pledge of own shares | Largely prohibited (§ 81 GmbHG) | Significantly more liberal; permitted if financed from unrestricted capital (balance sheet profit, distributable reserves) (§§ 15, 17, 18 FlexKapGG) |
| Redemption of shares | Almost never permitted | Legally permitted after the company has acquired its own shares |
| Forced redemption of shares | Generally not permitted; legislative materials refer to analogy with stock corporation law | May be provided for in the articles of association – a form of shareholder exclusion |
| Supervisory board requirement |
Generally required if the company employs more than 300 employees on average per year (§ 29 GmbHG) |
Same as GmbH, but additionally required if FlexCo qualifies as a “medium-sized corporation” under accounting rules: Must meet 2 of the following 3 criteria for 2 years (or 1 year in restructuring): – Balance sheet total > € 6.25 million – Revenue > € 12.5 million – More than 50 employees on average (§ 6 FlexKapGG) |
