Touching Down on the Host Country- Founding a limited Liability Company or a Corporation FORMATION D) 2 Limited Liability Companies(GmbHs) Identity and number of founders, scope of business activities and amount of legal capital articles of association Shareholders Agreement? Must be notarised and filed with commercial register (including a list of shareholders) Acting manager(equivalent to Ceo must be appointed who duly represents the limited liability company. Appointment of Supervisory board Composition (for companies not subject to codetermination laws Appointment of an Advisory Committee as a mechanism to balance interests of shareholder groups Composition Contributions in cash or in kind? 50%:50% CESLELECTIVE-APRIL2016 26
CESL ELECTIVE - APRIL 2016 26 Touching Down on the Host Country – Founding a Limited Liability Company or a Corporation (FORMATION I) ►Limited Liability Companies (GmbH’s) Identity and number of founders, scope of business activities and amount of legal capital articles of association Must be notarised and filed with commercial register (including a list of shareholders) Acting manager (equivalent to CEO) must be appointed who duly represents the limited liability company. Appointment of Supervisory Board (for companies not subject to codetermination laws?) Appointment of an Advisory Committee as a mechanism to balance interests of shareholder groups? Contributions in cash or in kind? Composition 50%:50%? Composition Shareholders’ Agreement?!
Touching Down on the Host Country - Founding a Limited Liability Company or a Corporation FORMATION (Non-Listed Stock Corporation Agreement on statutes and bylaws by founding members Name of company, scope of business activities Place of business Shareholders Agreement? Amount of legal capital/members contributions Mode of distribution of profits/financial year Appointment of Board of Directors and Supervisory board Contributions in cash or kind? Check requirements under capital market laws CESLELECTIVE-APRIL2016
CESL ELECTIVE - APRIL 2016 27 Touching Down on the Host Country – Founding a Limited Liability Company or a Corporation (FORMATION II) ►(Non-)Listed Stock Corporation Agreement on statutes and bylaws by founding members Name of company, scope of business activities Place of business Amount of legal capital/members contributions Mode of distribution of profits/financial year Appointment of Board of Directors and Supervisory Board Contributions in cash or kind? Check requirements under capital market laws Shareholders’ Agreement?!
Corporate Governance Structures-Directors' Duties 2 Duty of care owed by each member of the board of Directors in the light of the business judgment rule Fleshed out by employment contract, corporate governance codes and specific compliance schemes -Does the business judgment rule counterbalance litigious shareholders and judicial activism? Does the business judgment rule qualify as a safe harbour provision? 少 Directors liability and expert advice Director,'s liability and conflit of loyalties Should the Framework, Long-Term Cooperation or Joint Venture Agreement specify directors duties? CESLELECTIVE-APRIL2016 28
CESL ELECTIVE - APRIL 2016 28 Corporate Governance Structures – Directors’ Duties ►Duty of care owed by each member of the Board of Directors in the light of the business judgment rule -Fleshed out by employment contract, corporate governance codes and specific compliance schemes -Does the business judgment rule counterbalance litigious shareholders and judicial activism? -Does the business judgment rule qualify as a safe harbour provision? Director’s liability and expert advice Director’s liability and conflict of loyalties Should the Framework, Long-Term Cooperation or Joint Venture Agreement specify directors’ duties?
Corporate Governance Structures and the capital Market One-tier Corporations Participation of Labour in the Decision-Making Process Boardof Directors Accounting/Internal Control Mechanisms/Audit and Shareholders Remuneration Committees Two-tier Corporations Shareholders - Bondholders zOther creditors Board of Directors Supervisory board THE CAPITAL MARKET Shareholders CESLELECTIVE-APRIL2016
CESL ELECTIVE - APRIL 2016 29 Corporate Governance Structures and the Capital Market Accounting/Internal Control Mechanisms/Audit and Remuneration Committees Board of Directors Supervisory Board Shareholders Board of Directors Shareholders THE CAPITAL MARKET Shareholders – Bondholders Other Creditors Participation of Labour in the Decision-Making Process Two-tier Corporations One-tier Corporations
CHOOSING THE M&A DEAL STRUCTUrE Basics Board Shareholders Shareholders Board Target Co Assets and Risk iabilities Bidder co Analysis Assets and Liabilities Assets and liabilities Consider Take FINANCE AR over law Old B Share holders T shareholders hold Post-Merger: Bidder Co. holds its Cash. no stock assets and liabilities the old t ones CESLELECTIVE-APRIL2016
CESL ELECTIVE - APRIL 2016 30 CHOOSING THE M&A DEAL STRUCTURE - Basics - Target Co Assets and Liabilities Board Shareholders Bidder Co Assets and Liabilities Board Shareholders Assets and Liabilities Post-Merger: Bidder Co. holds its assets and liabilities + the old T ones Old B Shareholders T shareholders hold Cash, no stock Risk Analysis! FINANCE !? Consider Takeover law !