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Metamorphosis: Limited becomes a partnership

Company law

Metamorphosis: Limited becomes a partnership

The approximately 70,000 Limiteds, companies with limited liability under English law, which have their actual registered office in Germany, face a thorny future. When the United Kingdom leaves the EU on 1 January 2021, the incorporation theory dictated by the ECJ will no longer apply to English companies in Germany. They are therefore no longer legally subject to the law of their incorporation (UK) but to the law of their actual place of administration (Germany). Since there is a numerus clausus for corporations in Germany, Limiteds are to be treated as partnerships. Therefore, at midnight on 31 December 2020, the Limited has transformed into a GbR or OHG at the last stroke of the bell, with the consequence that the partners are personally liable for the full amount of the company's liabilities (so the OLG wishes of 5 August 2021,29 U 2411/21).