Corporate Compliance Requirements in Germany
Corporate Compliance Requirements in GermanyUpdated on Monday 19th October 2015
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Corporate compliance in Germany
One of the most important aspects of doing business in Germany is to acknowledge the requirements of the legislation with respect to the structure and compliance of a company. Corporate compliance in Germany can be defined as the observance of the laws, regulations and standards when opening a company in this country. German companies failing to respect these legal requirements are liable for civil and criminal sanctions. Corporate compliance requirements in Germany cover the following:
- - employment,
- - privacy and data protection,
- - banking,
- - fraud,
- - taxation.
One of the most common practices employed by German companies is to develop their own regulations regarding all of the above. Corporate governance in Germany is usually regarded as internal guidelines the management and employees will follow when conducting their activities.
The German Corporate Governance Code
The first Corporate Governance Code was developed by the German Government in 1995. At the time, the Code was meant for German joint stock companies listed on the Stock Exchange. In order to make sure these companies would follow all the legal requirements, the Government created a set of regulations the management had to comply with. Nowadays, corporate compliance has extended to the German private sector also. Among the regulations established by the new Corporate Governance Code in Germany, the most important are:
- - the improvement of the annual general meeting of the German shareholders which could take up 10 hours for large companies,
- - strengthening the position of minority shareholders,
- - increasing the liability of the management and supervisory board for providing inaccurate capital market information,
- - introducing independent auditors.
For more information about the Corporate Governance Code you can refer to our law firm in Germany.
Compliance officers in German companies
Under the Corporate Governance Code, all German public and private companies’ managers are required to organize the company in a way that it respects the legal system with a particular accent on preventing crimes and offenses. This is the main reason most companies nowadays appoint a compliance officer who is in charge with drafting the regulations for best practices. The compliance officer is usually in charge with preventing crimes according to the German Penal Code.
If you need help in drafting an internal corporate governance code for your company you can contact our lawyers in Germany.