Avoid the #1 Litigation Blunder: Incomplete or incorrectly spelled Company Names of German Defendants
In corporate litigation, there can be no “close enough” approach when it comes to the designation of the Plaintiff or Defendant. A litigation lawyer who sues a German company must be dead-on with all factual information about the parties. The name of each company, corporation or partnership involved in the German civil procedure must be absolutely precise, complete and up to date.
Otherwise, under German civil procedure rules, you may lose the lawsuit. Simply because you have sued the wrong defendant. The German civil procedure buzzwords for this problem are “falscher Beklagter” and “fehlende Passivlegitimation”.
Even if the (incorrectly designated) defendant remains entirely passive throughout the German civil lawsuit, i.e. the Defendant does not object to anything and your client is thus awarded a German default judgment (Versäumnisurteil), the client’s joy about the German court judgment will most likely be short-lived, since chances are that the client will soon learn that the judgment is unenforceable.
Why? Because the German bailiff (Gerichtsvollzieher) and the German court competent for seizing assets (Vollstreckungsgericht) will refuse to take any actions of enforcement (Zwangsvollstreckung) based on that judgment as soon as they realize that he Defendant’s name is incorrect or unclear. And they will realize because the Defendant will now object and bluntly state “that’s not me on the German judgment”.
When filing a lawsuit against an German business, be absolutely certain to use the correct company name of defendant
It is, therefore, a rather costly and embarrassing mistake when a foreign, i.e. non-German, litigation lawyer who files a complaint against a German legal entity is a bit careless about the defendant’s legal name or/and business address.
Even if the Plaintiff’s lawyer is not being sloppy, mistakes can easily be made, because many companies only give a short version of their actual company name on their stationary and on their website.
If a lawyer does not verify the full company name with the German company register before filing the lawsuit, the damage is done. Naming the wrong party is particularly dangerous when the Defendant is part of a group structure (in German called “Konzern” or “Unternehmensgruppe”).
Big corporations like Siemens, BMW or Volkswagen, for example, have hundreds of subsidiaries and project companies. Sometimes, those subsidiaries have very similar names and the difference is only one letter, one figure or the added name of a town. So, “XYZ Project GmbH” is not necessarily identical with “XYZ Project GmbH, Munich”.
The ending tells you the legal nature of the German business
Also, the ending of the company name is extremely important because that annex to the company name (which is usually an abbreviation)tells you whether the German business is actually a corporation, a limited liability company, a partnership or some other legal entity. It is extremely easy to make a mistake here!
Don’t miss! One Letter can be a Game Changer
Let’s use my own law firm as an example. On our websites, blogs and brochures, our law firm uses the name “Graf Legal”. This is, however, only the unofficial trade name for our US-German law department. The actual and legally correct name of our law office, as filed with the German company register, is this:
Graf & Partner Partnerschaftsgesellschaft mbB
The above business is, however, an entirely different entity compared to:
Graf & Partner Partnerschaftsgesellschaft mbH
Did you even notice the difference between the two? The diffference is only in the last letter. With regard to the first entity, i.e. in “Partnerschaftsgesellschaft mbB”, the “mbB” stands for “mit beschränkter Berufshaftung”, i.e. „limited professional liability“, which means that the entity is a German partnership of professionals (in this case lawyers) and damage claims based on malpractice against these lawyers are capped. For any other claims and debts, all law firm partners remain fully liable with their entire fortune.
In contrast, “Partnerschaftsgesellschaft mbH” is something entirely different, because “mbH” stands for “mit beschränkter Haftung” which means that this is not a partnership, but a company and the entire liability of the company is limited, regardless of what the claim against the company may be based on. Thus, one single letter (B or H) makes the difference whether you sue a German limited liability partnership of natural persons or a German company.
How to research the correct name of a German business
As shown above, you cannot rely on the defendant’s website or stationary. Instead, you must do a proper search on the German company register (Handelsregister) in order to find out the official legal name of the company you want to sue, i.e. the legal name under which it has been incorporated and is officially registered with the German company register. Also, you should use the Germany company’s official registration number in the petitions to the German court.
The first step would be a basic online name search, which is explained below. In larger cases, you should obtain a complete extract on the company from the German company register (Handelsregisterauszug). These German company register documents show you the company history with regard to directors, shareholders, office addresses etc. In addition, you can check the financial history of the company by inspecting their annual financial reports. This does not work for all German businesses, however, only for companies, corporations and certain partnerships.
We explain how to read a German company register extract in this post here.
In order to practice an online search, let’s use the example of the German company which uses “airstage” as the trade name on their website. The contact informatiuon they give on their website looks like this:
Now, if you take the information on their website at face value, you will probably file a lawsuit against a German business by the name of “airstage”. But is that their actual legal name? You can research this for yourself by visiting the official German company register website Unternehmensregister. Big surprise: The search for “airstage” in the official company register comes up empty:
If you then do some more research on the company, either by using their address or the company number, you will find that the official company register record of the defendant shows that the actual name of the company is “Effekt-Technik GmbH”. The term “airstage” does not appear in the official records at all.
This detail is extremely important because if you rely on the website and sue against “airstage”, all the German the court documents as well as the final court order will also name “airstage” as the Defendant. This will most certainly create procedural problems later on, either when it comes out during the civil procedure or when you wish to enforce the court order, because it is simply not the correct company name and no company by the name “airstage” does exist.
Now, if the name issue comes up during the ongoing civil procedure, the German Defendant will probably not be able get away with arguing that the lawsuit does not refer to them, because they use this name on their official website http://airstage.de/kontakt/ Still, even if it would cause merely a procedural hiccup by generating a query from the German court, this may costs a few weeks.
The problem is indeed greater if the court has actually already handed down a judgment which designates the defendant with an incorrect name and this judgment has already become binding. Then chances are, you have obtained an entirely useless judgment because it will not be enforceable.
In order to avoid all such confusion, the Plaintiff’s litigation lawyer, in the above example, should use the following company details, especially the company register number:
Effekt-Technik GmbH, a limited liability company established under the laws of Germany, registered with the German Company Register kept at District Court (Amtsgericht) Stuttgart under the company register no. HRB 225042. The official company address is: Nürtinger Str. 64, 72667 Schlaitdorf, Germany. The company is being represented by their company directors (Geschäftsführer) Mr Rainer Mugrauer and Mr Günther Mugrauer.
If the petition to the German court specifies the company like this, there is no room for error whatsoever.
Long Story short
Before filing a complaint in a German civil lawsuit, make absolutely sure that you have researched the complete and accurate company name as well as their correct current address and the correct names of the current partners or company directors.
- German Laws relating to Civil Litigation
- Know Your Way around German Civil Courts
- How to retain a German Lawyer
For legal advice on German civil procedure and how to successfully litigate in Germany, contact the international litigation experts and trial lawyers of GrafLegal.
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