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Can a licence pursuant to Section 1 of the German Temporary Employment Act (AÜG) be retained for the purchase of a GmbH?

Legislation has placed various professional and service sectors under special observation. Therefore, in many cases, the exercise of a profession is allowed only if the trader has a special licence to do so. This applies, for example, to transport, brokerage and property development services, pawnbroking, tax or legal advice to name but a few. The catalogue of activities subject to licensing is very extensive.

Also, the commercial leasing of labour is generally only permitted if the trader has received a special licence from the Federal Employment Agency.

The granting of licence is regulated in more detail in Section 1 of the German Temporary Employment Act (AÜG). In order to obtain the licence, the applicant must submit extensive documentation. Furthermore, proof of capital is required and proof of economic reliability must also be provided in addition to proof of creditworthiness.

It matters whether the applicant is a natural person or a legal person. Especially in the latter case, namely if it concerns a legal person (e.g. in the legal form GmbH/AG or a commercial partnership such as GmbH & Co. KG), this person becomes the holder of the licence. This opens up the possibility for the buyer of such a company to „buy“ the licence with it, so to say. Strictly speaking, however, they don’t buy the licence, because it’s personal. However, if the legal entity is a legal person – for example a GmbH – then the buyer of the GmbH receives the commercial labour leasing licence as an „addition“. This is interesting because the purchase of a GmbH with a licence is possible within a few days, whereas the application and granting of licence can take many months.

The question now arises as to whether the „co-acquired“ licence continues unchanged and can be used immediately when a GmbH is purchased, or whether this is not the case.

The answer can be found by referring to Section 4 of the German Temporary Employment Act (AÜG). There it says: „…the licence granted (to the GmbH) (can only) be withdrawn within the scope of Section 4“.

In addition, the licence may be revoked on the basis of the provision in Section 5 of the German Temporary Employment Act (AÜG) if the conditions set out therein are met.

However, a mere change of shareholder in the GmbH or a change in the management of the GmbH is usually not part of such a requirement. In principle, the licence may not be withdrawn or revoked In any case, not if the aforementioned circumstance does not result in a different general assessment for the GmbH. Conversely, it is only if a different, i.e. negative, assessment were to result from the transfer of the GmbH shares that the authority would actually be entitled to revoke the licence pursuant to Section 4 of the German Temporary Employment Act (AÜG) or – depending on the actual state of affairs – to revoke it pursuant to Section 5 AÜG.

In the vast majority of cases, however, a mere change of shareholder status, a change of managing director and a relocation of the registered office does not normally result in the fulfilment of any circumstances that would entitle cancellation or revocation of the licence. In principle, it is therefore possible to take over a GmbH and to use the previously granted licence unchanged without any problems. Nevertheless, the new managing director (not the shareholder) must prove with a certificate of good conduct and an extract from the central trade register that there are no characteristics which make this managing director appear unreliable.

It should be noted that it is possible to buy an existing company – such as a shelf company with a labour leasing licence – without the licence still being valid. In other words, if a GmbH is purchased with a valid licence, it remains in place and business operations can commence.


Can I change the company name or the purpose of a shelf company?

If you have decided to purchase one of our companies, you can usually adapt the purpose and the company name to your wishes without restrictions. We coordinate the company name and the purpose with the responsible chamber of commerce and industry for you. If it gives you the green light, nothing more stands between you and your desired company.

Below are a few tips on company names and purposes:

  • Specify your business area. For example, „trade in goods of any kind“ is not accepted by the local courts because it is not sufficiently specific. For example, list your purpose as follows: „trade in goods of all kinds, in particular foodstuffs and spirits“.
  • Avoid „general store.“ This means that less is more. If, for example, you plan to operate a retail shop or online retail as well as importing and exporting textiles, you should avoid, for example, „running a hairdresser’s shop“ or „gardening“.
  • Personalise your company name: Invented names as well as abbreviations, numbers or initials are individual and distinguish yours from other companies.
  • – The address of registered office need not be the same as the business address. If your business address is in Wuppertal, for example, the registered office listed in the commercial register can also be in Cologne or another city/municipality.

I have acquired a company with labour leasing licence. What do I have to watch out for now?

 

In case of sale, we will inform the Düsseldorf employment agency (Agentur für Arbeit) about the changes. Below are some instructions that you should follow:

 

  • Any changes (company name, managing director, sales, business address, transfer contracts, employment contracts etc.) must be reported to the responsible employment agency (Agentur für Arbeit Düsseldorf, Kiel or Nuremberg).
  • The licence extension must be applied for at least three months before expiry and received by the responsible employment agency.
  • The employment agency will ask you for a certificate of good conduct and an extract from the central trade register. Therefore, a „clean slate“ is mandatory.
  • If you have had an AÜG licence revoked and a business prohibited in the last five years, you may also have your acquired company’s licence withdrawn.