Criticism of steward-ownership
Dhe years of efforts by the start-up scene to create a new legal form have suffered a severe setback. The legal initiative of the Berlin Foundation for steward-ownership for a new GmbH with tied assets, GmbH-gebV for short, is supported by the Scientific Advisory Board at Federal Ministry of Finance viewed very critically. According to a statement published by the advisory board on Thursday, he cannot recommend the introduction of such a legal form.
“The proposed variant of the legal form would trigger serious governance problems and result in legal and politically problematic cross-generational restrictions on freedom,” complain the almost three dozen scientists, including well-known economists such as Marcel Thum, Jörg Rocholl, Clemens Fuest, Johanna Hey and Volker Wieland in their 16-page paper. They repeated the concerns expressed in the specialist literature that the new company variant could be misused as a tax-saving model. Economist Lars Feld, who is a member of the panel, issued a dissenting opinion, stressing that potential concerns could be addressed.
Anachronistic company law
The study focuses on an initiative by the steward-ownership foundation led by the entrepreneur Armin Steuernagel, who has been promoting his proposal in a very creative way for more than two years – at that time still under the term “steward-ownership”. To this end, Steuernagel has supporters appear in costumes from the imperial era in order to illustrate how anachronistic German corporate law is.
The attention of the Federal Minister of Justice and self-confessed science fiction fans Marco Buschmann (FDP) got Steuernagel with the help of a “Star Wars” costume that he wore at the last German Lawyers’ Day. So far, however, success has been limited: the lead Federal Ministry of Justice is currently working on a corresponding draft law, but there are still concerns about European law, a spokeswoman said on request.
Steuernagel and his supporters are concerned with creating a new type of company that is designed for sustainability. They are inspired by the family businesses that enjoy an almost unshakable reputation for value-oriented corporate management in Germany. This model is supposed to be about a “family of values” that does not pursue any monetary interests, but is only committed to the well-being of the company.
Advisory Board does not skimp on criticism
The core of the proposal is therefore a mandatory payout ban. Any distribution of profits to the shareholders of a GmbH-gebV should thus be prohibited. In the event that a shareholder leaves the company, he will only receive compensation in the amount of the nominal value of the contribution, not the current value of the share. The same applies to the liquidation of the company: Any excess assets are to be distributed either to another GmbH-gebV or to non-profit organizations.
The Scientific Advisory Board does not believe in such a distribution ban. Sustainable, long-term corporate management and financial interests are not opposites, they write in their statement. They even assume the opposite: In such a constellation, there would be little incentive for the owners to ensure the best possible use of the funds. They fear that wealth will grow less or be lost faster than with good governance. In addition, there are no incentives to inject equity, which increases the dependency on external financing. This can lead to considerable problems, especially in an economic crisis, because external investors are difficult to find for a GmbH-gebV.
The committee points out that the existing legal system already offers sufficient scope for responsible entrepreneurship. The summary is therefore: “The state should also not provide any new legal form that is at the expense of third parties by being misused as a tax-saving model.” gift tax.
Steuernagel, however, rejected the allegations: “When you read it, it quickly becomes clear that this is not a scientific, but a political statement,” he criticized. “Without exception, all the arguments put forward have been debated and refuted in the scientific discussion of recent years.” Due to its imprecision, the statement raises the question of the extent to which all relevant scientific statements have been studied here – or have been selectively left out.”
