Stock Corporation (AG)	2

Abstract

The following chapter provides an introduction into the legal framework for the German stock corporation, the Aktiengesellschaft (AG ).After outlining its characteristics and some of the reasons for entrepreneurs to choose this corporate form, the institutional design of theAG will be explained in detail. We will have a closer look at the corporate bodies (Organe) of theAG, covering their composition, their respective functions and competencies, and explaining their relationship to each other. Then, we will outline the capital regime of the German stock corporation, as one of the most distinctive features of the AG. Furthermore, we will briefly describe how an entrepreneur would establish an AG under German law and how it is dissolved. We will continue our presentation by discussing the German system of employee participation, including collective wage bargaining, works councils and board-level co-determination. In the final section, we will outline some of the most important rules to be aware of when considering ‘going public’, i.e. listing anAG on a stock exchange.

Contents
2.1	Introduction				38
	2.1.1	Case Study . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . .	38
	2.1.2	Characteristics of theAG	. . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . .	38
	2.1.3	Advantages of theAG . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . .	39
	2.1.4	Disadvantages of theAG	. . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . .	40
2.2	Internal Organization				41
	2.2.1  Governance Structure and Bodies of theAG				41
	2.2.2	Management Board (Vorstand ) . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . .	42
	2.2.3	Supervisory Board (Aufsichtsrat) . . . . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . .	45
	2.2.4	Advisory Board (Beirat) .	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . .	47
	2.2.5	Stockholders’Meeting (Hauptversammlung) . . . . . . . . . . . . .		. . . . . . . . . . . . . .	47
2.3  The Capital of theAG . . . . . . . . .			. . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . .	53
	2.3.1	Equity and Capital Structure . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . .	53
	2.3.2  Share Capital of the Stock Corporation				55
	2.3.3	Capital Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . .	58
M. Schulz, O. Wasmeier, The Law of Business Organizations,					37
DOI 10.1007/978-3-642-17793-4_2, © Springer-Verlag Berlin Heidelberg 2012