How can I sue a foreign company?
Which law is responsible for the foreign company?
This answer is dated 06/18/2008 and may be out of date. Ask your current question now and get a legally binding answer from a lawyer.
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Dear person seeking advice,
I would like to thank you for your request and, taking into account your commitment, answer it as follows:
1. In principle, the competent court and the applicable law are based on the registered office of the company. In your case this would be e.g. the Virgin Islands if the Limited was properly established.
However, according to established German case law, the actual administrative seat must also be there. Because if the actual administrative seat is in Germany & lpar; decisions of the management, business activities etc. & rpar ;, the statutory foreign seat is not recognized according to the dominant seat theory that continues to apply for international jurisdiction outside the European Community. In the absence of an entry in the domestic commercial register, the company would therefore have to be treated as a domestic partnership. Consequently, in this case the court of the place of residence of the managing director would have jurisdiction and the action would be judged according to German law.
As a result, it can be stated in this regard that only with an actual administrative seat abroad & lpar; which would be difficult to realize and prove if the managing director is resident in Germany & rpar; foreign law applies and the competent court abroad would have jurisdiction. The only exception to this is a separate jurisdiction agreement & lpar; only permitted between companies & rpar ;, the contractual agreement foreign law & lpar; also only permitted to a limited extent & rpar;, registration with the German commercial register & lpar; then a German court would have jurisdiction, but the applicable company law would be that foreign & rpar; or the company's actual activity abroad.
2. In principle, only the company can be sued. However, according to German and foreign law, there are considerable liability claims against the managing directors and those actually acting if they fail to meet their statutory and statutory obligations. An example of this is the liability for the delay in bankruptcy in the event of late filing for insolvency of a GmbH and the liability of the director of a limited company if the annual return is not submitted. In this context, it should be noted that, especially abroad, violations of formal regulations are also severely punished and are not seen as a trivial offense there.
3. According to Section 33 of the German Banking Act, financial portfolio management is subject to authorization. This includes all commercial transactions with financial services in Germany & lpar; there are comparable regulations throughout the EU & rpar; regardless of whether these are run by a foreign or domestic company. If the actual action takes place in Germany, permission from BaFin will be required. It does not matter whether you only do business with foreigners or also with Germans. The place of work alone is decisive.
If, after my answer, you are still interested in the establishment of a foreign company, I urgently advise you to seek out a specialist lawyer you trust, as the establishment and operation of such a company involves considerable liability risks, which, however, can be minimized by good legal advice can be.
I hope that with the above answer I have given you a first overview and I wish you every success in clarifying the matter.
I would like to point out that adding or leaving out factual details can lead to a completely different legal assessment.
You are welcome to use the demand function.
With best regards
- Lawyer -
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Dear Mr. Lattreuter,
Thank you for your detailed answer & excl;
I would like to use the opportunity to inquire about a situation in more detail and ask for your opinion:
Portfolio management, which, however, should not be performed in Switzerland, but exclusively abroad & lpar; Switzerland & rpar ;.
Assuming that the offer had been made by a Swiss-based hedge fund & lpar; registered in the Caribbean & rpar; manage. This hedge fund is not publicly offered / advertised in Germany.
This administration is carried out by an XY Ltd. made in the British Virgin Islands & lpar; BVI & rpar; is registered.
The shareholders and managing directors of this XY Ltd. live in Germany and Austria, although there is no place of business here but an address in BVI.
If everything goes well, there will certainly never be trouble, but should the case arise that there are any problems, there is the possibility that the shareholders and managing directors of XY Ltd. E.g. get in personal trouble with the Bafin or the Swiss supervisory authority because you live in Germany? Or is there no access here and only XY Ltd. is liable?
Thank you and best regards
Dear person seeking advice,
First of all, thank you very much for your inquiry.
Since the portfolio management takes place exclusively in Switzerland, i.e. not in the EU, the actual administrative headquarters of the Limited are also likely to be in Switzerland, since this is where the business-relevant decisions are made and the main part of the administrative activity should take place there. In addition, this can also be made very plausible to the German courts and BaFin, since the travel route to Switzerland from Germany / Austria alone is not so significant that it cannot be proven that the managing directors are often there. This means that trouble with the German courts or BaFin can be ruled out. The prerequisite for BaFin, however, is that no financial services are offered directly by the Limited or its representative in Germany. However, this does not include the business of other companies.
Unfortunately, I cannot help you with your question about the Swiss supervisory authorities. Unfortunately, I do not have the specific knowledge of Swiss financial law for precise legal information.
If you have any further questions, please do not hesitate to contact me by phone.
With best regards
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