Cologne, Germany -- (SBWire) -- 06/14/2013 --GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Bremen, Dusseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London www.grprainer.com/en conclude: The formation of a limited liability company (Ltd.) can thus be structured for the purpose of economic profit, but other economic purposes are also plausible. The Treasury, for example, utilizes the form of a limited liability company (Ltd.) to ensure services of a general interest are completed. This provides the Treasury with advantages because it can exercise influence and, at the same time, it excludes itself from the liability of the company. Nowadays, so-called freelance limited liability companies or freelance limited liability partnership companies are recognized, so that lawyers, tax consultants and engineers can utilize the form of the limited liability company (Ltd.). A limited liability company (Ltd.) which becomes established for non-profit purposes is formed just as well as other purposes which have a non-economic purpose.
However, there are also certain purposes for which a limited liability company (Ltd.) is not allowed to be formed. Those include, for example, purposes that violate law if exclusions from being legally prohibited do not apply. Legal prohibitions are considered those that prohibit an actually generally accepted legal transaction due to the content of the transaction (not the transaction itself). Such a prohibition must not be expressly referenced. Further, the intended purpose should also not infringe on good moral conduct.
If the company pursues the fulfillment of a prohibited purpose, the social contract is essentially null and void. Cancellation can be made by any party before entry is required into the commercial register so that the company will not be legally registered as an entity by the Court. After company registration, only an action for annulment or removal of official registration of the company is possible as a company legal entity has already been formed and existed at one point despite an unacceptable line of business. However, if the purpose of the company is prohibited and the line of business is allowed, then this results at most in a right of withdrawal of shareholders or the possibility of an action for dissolution. As long as there is no danger to the public interest, then an official dissolution is definitely possible.
Company law is a very complex issue. Both for the layman as well for shareholders, it can often be difficult to keep track. Here, a corporate law attorney can help. In particular with regards to the purpose of the company, it can be beneficial to consult with an attorney in advance of forming the company and to structure the formation of the company together with the social contract as best as possible. Difficulties that may occur later can be kept to a minimum as much as possible by planning in advance.
About GRP Rainer LLP
GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Munich, Stuttgart, Bremen, Nuremberg and London UK.
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The Purpose of a Limited Liability Company (GmbH/Ltd.)