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A Ltd. company can be liable for a small business with the same name
A Ltd. company can be liable for a small business with the same name
Limited liability companies can be liable for bad investment counseling by an individual enterprise with the same name.
Cologne,
Nordrhein Westfalen,
India
(sardnews.org)
04/09/2012
http://www.grprainer.com/en/GmbH-/-Limited-Liability-Company.html Limited liability companies can be liable for bad investment counseling by an individual enterprise with the same name.
GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Hamburg, Munich, Stuttgart, Frankfurt www.grprainer.com explain: The German Federal court of justice (Bundesgerichtshof - judgment from 05.07.12 - II ZR 116/11) ruled on the preconditions of a company's continued liability according to § 25 of the German commercial code (HGB). Limited liability companies sharing the same name as individual enterprises can be liable for bad investment advice.
The ongoing business activities are substantial for identifying a company's continued liability. § 25 HGB regulates the liability of the buyer. It will hold true if the old company is abandoned and a new one is founded, but the companies remain essentially the same in name and in their activities. Should one of these companies show a continuity of business traffic to a third party, then this company becomes liable for the dealings of the old company.
In the above mentioned case, the clients had the impression that they were dealing with one and the same company. Therefore the addition of the "GmbH" label was not considered. These criteria will be applied in the determination of liability for the GmbH to examine, if a connection exists between it and the previous business. In light of this, the new company is liable for the actions of the old company in accordance with § 25 HGB. Should the § 25 HGB not be applicable then it is still possible for the company to become liable. The GmbH should consider the claims against them to be valid, if it appears to belong to the original enterprise. In this case, a law of liability can be applied. The prerequisites are similar to § 25 HGB for this case. If it appears to a third party that the new company is a direct successor, is legally responsible for the previous enterprise or comprises a unit with it, then legal claims can be made against the GmbH. The GmbH should not be able to claim non-partisanship because it is not the right party.
If you have been affected by bad investment counseling, then talk to an experienced corporate lawyer. A lawyer proficient in this area will check extensively on a case by case basis what claims you are entitled to, and against whom they can be made. Furthermore, the lawyer can help you make the right decisions for the future.
http://www.grprainer.com/en/GmbH-/-Limited-Liability-Company.html
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About GRP RainerLLP
Lawyers and tax advisors GRP Rainer http://www.grprainer.com/en/ international German law firm counsels on business law, commercial law, corporate and distribution law. The firm advises companies, corporations and mid-sized businesses from offices in Berlin Bonn Cologne Duesseldorf Frankfurt Hamburg Munich Stuttgart, Germany and London, UK.
Contact:
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50672 Cologne
Germany
T +49-221-2722750
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