A company with limited liability can be liable for a small business with similar name

Limited liability companies might be liable for poor investment counseling through a business with the exact same title.
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Cologne, AR (prHWY.com) December 6, 2012 - Cologne, Nordrhein-Westfalen ( prhwy ) December 5, 2012 - http://www.grprainer.com/en/GmbH-/-Limited-Liability-Company.html Limited liability companies might be liable for poor investment counseling through a business with the exact same title.

GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Hamburg, Munich, Stuttgart, Frankfurt www.grprainer.com/en explain: The German Federal court of justice (Bundesgerichtshof - judgment from 05.07.12 - II ZR 116/11) ruled on the particular preconditions of an company's continued culpability as outlined by § 25 in the German commercial code (HGB). Limited liability businesses with the same title as individual corporations may be accountable for negative investment recommendations.

The ongoing enterprise activities are significant with regard to discovering a company's continued legal responsibility. § 25 HGB regulates the particular culpability of the buyer. It is going to maintain true in the event the old company is abandoned and another one is founded, however, if the companies are fundamentally identical within brand along with their own activities. Should one of these companies display a continuity of business to the public, then the company will become responsible for the doings of the old firm.

In the previously listed case, the clients were under the impression that they were dealing with one and the exact same business. Therefore, the addition of the particular "GmbH" brand had not been deemed relevant. These types of requirements are going to be applied to the actual resolution of legal responsibility for the GmbH to analyze, if there is an interconnection between it and the previous enterprise. Considering this, the new firm is accountable for the actions of the previous organization in accordance with § 25 HGB. Should § 25 HGB not be appropriate, then it's nevertheless possible for the company to be accountable. The GmbH should consider the claims towards it to be valid, when it generally seems to be part of the original venture. In this instance, legislation of responsibility holds true. The actual prerequisites resemble § 25 HGB, in this case. When it appears to a third party that the brand new firm is an immediate heir, then claims can be produced against the GmbH. The GmbH really should not be capable of declaring non-partisanship because it's not really the correct enterprise.



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Categories: Law

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