The Contract For LLC Partnership is a crucial document required when establishing a limited liability company (GmbH) in Germany. It serves as the foundational agreement between partners who wish to form a GmbH, which is one of the most popular business structures in Germany due to its liability protection and flexible governance options. This document must comply with the German Limited Liability Company Act (GmbHG) and needs to be notarized before registration in the Commercial Register (Handelsregister). The contract typically includes essential provisions about company formation, capital contributions, management structure, profit distribution, and share transfer restrictions. It's particularly important as it sets the framework for the entire business relationship between partners and serves as a reference point for future business operations and dispute resolution.
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1. Parties: Identification and details of all founding partners/shareholders
2. Background: Context of the partnership formation and purpose of the agreement
3. Definitions: Key terms used throughout the agreement
4. Company Name and Registered Office: Official company name (including 'GmbH') and registered address
5. Corporate Purpose: Detailed description of business activities and objectives
6. Share Capital and Contributions: Total share capital, division of shares, and contribution details
7. Shareholders Rights and Obligations: Core rights and duties of shareholders including voting rights
8. Management and Representation: Appointment, removal, and powers of managing directors (Geschäftsführer)
9. Shareholders' Meetings: Procedures for convening and conducting shareholders' meetings
10. Resolutions: Decision-making processes and majority requirements
11. Transfer of Shares: Rules and restrictions regarding share transfers
12. Financial Matters: Profit distribution, loss allocation, and accounting principles
13. Term and Termination: Duration of partnership and termination provisions
14. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction
1. Non-Competition: Restrictions on partners engaging in competing businesses - include when partners have other business interests
2. Intellectual Property Rights: IP ownership and usage rights - essential when the business involves significant IP
3. Advisory Board: Structure and powers of an advisory board - useful for larger partnerships or complex businesses
4. Tag-Along/Drag-Along Rights: Special share transfer provisions - important for partnerships with potential exit strategies
5. Deadlock Resolution: Procedures for resolving partnership disputes - crucial for equal partnerships
6. Additional Financing: Provisions for future capital increases or funding - important for growth-oriented businesses
7. Employee Participation: Framework for employee share ownership - relevant if planning employee participation programs
1. Initial Business Plan: Detailed business strategy and financial projections
2. Shareholders List: Complete list of shareholders with their respective shareholdings
3. Initial Contributions Schedule: Detailed breakdown of each partner's initial capital contribution
4. Management Rules: Detailed procedures for day-to-day management
5. Specimen Signatures: Official signatures of managing directors and key representatives
6. Company Assets: Inventory of initial company assets and their valuation
7. Special Rights: Details of any special rights or obligations granted to specific shareholders
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