Some of the new legislative situation's cornerstone details to be taken into account are as follows:
- The new provisions in German stock corporation law - i.e. all legislative changes affecting the execution of Related Party Transactions - apply immediately without restriction, i.e. since the law came into force on January 1, 2020.
- The threshold value relevant for the entire new catalogue of obligations’ activation is 1.5 percent (of the sum of fixed and current assets according to the most recent annual or consolidated financial statements), instead of the 2.5 percent threshold originally envisaged for this purpose.
- Related party transactions, which are, however, carried out in the ordinary course of business and at arm's length, are considered to be completely exempt from the new catalogue of obligations under Articles 107 and 111a to 111c of the German Stock Corporation Act.
The adjustment of already existing internal procedures - including the aforementioned aspects of the amendments to the law - as well as the first-time implementation of such processes in the company’s day-to-day business is recommended for every listed stock corporation - in particular for those regularly conducting Related Party Transactions in excess of the adopted catalogue of obligations’ threshold value.
