1 Methodological Objective
In order to analyse the life-cycle of an international company in an understandable and
practical way, this paper will deal with a fictional company named “Exx”, founded by four
former business students, reconstructing its steps in its business life-cycle from the stage of
founding until the liquidation, through a descriptive case study.
2 Foundation and Registration
2.1 Decision of legal form
The first step before founding a company is to decide which legal form is fitting its goals
and needs.
Considering their demands, the founders soon determine that a capital company would be
appropriate. According to Tegen, Reul, Heidinger and Tersteegen, this kind of legal form
has the advantage of limited liability and its corporate structure. Also the duties of its
members are reduced to the raising of deposits.
Because as a start-up company “Exxx” is not supposed to participate at the stock exchange
yet and all of the founders want to actively participate in the company as associates, the
final decision is a limited liability company, namely the GmbH.
The GmbH is a legal entity and it has a limited liability, which means, that the associates
are liable only with their companies assets (13 Abs. 2 GmbHG). In case of insolvency, the
four founders will not lose their private properties. As already mentioned, therefore they
have to raise the deposits.
Another important advantage is the basic principle of the so called Satzungsautonomie,
which means that the associates have wide freedom in creating their articles of association.
Also, as the GmbH is constructed for a small number of associates, which means they are
able to influence the CEO (37 Abs. 1 GmbHG).
Disadvantages, on the other hand, are the strict regulations of raising and sustaining capital
and the disclosure obligations (325ff. HGB) (Tegen, Reul, Heidinger and Tersteegen,
2009).
2.2 Process of founding
Now the process of founding shall be initiated. Because the company is set up by four
persons, a simplified founding (2 Abs. 1 GmbHG), as it was introduced by the MoMiG
(act to modernise GmbH law) in November 2008[1] cannot be chosen, because it is
constructed for companies with three founders and less.
The founding of a Mini-GmbH, another reform of the MoMiG, can also be excluded,
because the founders do not have trouble raising the share capital.
The process of founding begins with the setup of the contract of association, signed by all
