## Facts

- A German private limited-liability company (GmbH) had its registered seat in Munich.
- The sole shareholder resolved to amend the articles to move the company’s seat from Munich to London while preserving the same legal entity.
- The German companies registrar refused to register the amendment, applying German seat theory and concluding the company would lose legal capacity under German law and require winding up.
- The company’s administrative objection failed, and a lower court upheld the registrar’s refusal.
- The company appealed to the Bavarian Court of Appeal, arguing German law permitted the change and that EU freedom of establishment required registration.

## Issues

1. Whether German law allowed a GmbH to transfer its seat to another EU Member State by amending its articles while retaining its German legal personality, or instead required dissolution and liquidation.
2. Whether EU freedom of establishment (then Arts. 52 and 58 EEC) obligated Germany to register and recognize an outbound seat transfer of a German company without loss of identity.

## Decision

- The court dismissed the appeal and upheld the registrar’s refusal to register the seat-transfer amendment.
- Under German law, a GmbH could not transfer its seat abroad while remaining a German legal person; moving the seat outside Germany entailed loss of German legal capacity and required winding up.
- Freedom of establishment did not require Germany to permit an outbound change of corporate connecting factor that would preserve the company’s German status.

## Legal Principles

- Under German seat theory, the applicable company law and recognition of legal personality are tied to the company’s seat; relocating the seat abroad breaks the connecting factor for German corporate status.
- A GmbH may not “emigrate” and retain its identity as a German company absent a statutory mechanism authorizing a cross-border seat transfer.
- EU freedom of establishment protects access to conduct business in other Member States (including via branches or new incorporations) but does not, by itself, compel the home state to maintain a company’s domestic legal status after an outbound transfer of seat.
- Member States may define the connecting factor for corporations formed under their law and may treat abandonment of that factor as terminating eligibility for domestic corporate personality.
- Creditor-protection and regulatory-control considerations may support requiring liquidation when a domestic company seeks to relocate its seat abroad without reconstitution under the destination state’s law.

## Conclusion

The court held that a German GmbH could not move its seat from Germany to the United Kingdom through a mere amendment of its articles while keeping its German legal identity; the registrar properly refused registration because the move would require liquidation under German law, and EU freedom of establishment did not mandate a contrary result.


Re Expatriation of a German Company, [1993] 2 C.M.L.R. 801 (Bav. Ct. App. 1992)