On the Future of European Creditor Protection and Capital Maintenance from a German Perspective
DGRV Working Paper No. 1/2010
20 Pages Posted: 10 Aug 2010 Last revised: 4 Jan 2013
Date Written: March 31, 2010
An alignment of corporate policies with respect to the strategic objectives of the shareholders requires that the economic concerns of stakeholders are sufficiently protected by contracts or legal controls. Hereby, an important constraint is constituted by creditor protection legislation, in particular with respect to dividend payouts. These capital maintenance regulations are currently under close scrutiny. The annual non-consolidated financial statement, which follows the “modernized” German Commercial Code (Handelsgesetzbuch or ‘HGB’) is in danger of being replaced by IFRS accounting, supported by a solvency test. This paper aims to discuss the potential consequences from an economic, legal and political perspective. One major objective is to convey an idea of the German view on this subject.
Keywords: Capital Maintenance, Creditor Protection, Solvency Test, IFRS, German Commercial Code, Dividend Payouts
JEL Classification: K20, M41, M48, G35
Suggested Citation: Suggested Citation