{"id":10338,"date":"2026-11-10T13:16:20","date_gmt":"2026-11-10T12:16:20","guid":{"rendered":"https:\/\/tigges.legal\/?p=10338"},"modified":"2026-11-10T13:16:22","modified_gmt":"2026-11-10T12:16:22","slug":"new-publication-by-marius-rosenberg-in-the-legal-industry-reviews","status":"publish","type":"post","link":"https:\/\/tigges.legal\/en\/new-publication-by-marius-rosenberg-in-the-legal-industry-reviews\/","title":{"rendered":"New publication by Marius Rosenberg in \u201cThe Legal Industry Reviews\u201d"},"content":{"rendered":"\n

Acquiring a German Mittelstand Company \u2014 Marius Rosenberg<\/a> discusses this topic in the 12th issue of LIR Magazine for Germany (The Legal Industry Reviews<\/strong>). This digital publication is produced in collaboration with leading German commercial law firms and highlights current developments in the legal industry.<\/p>\n\n\n\n

Acquiring a German Mittelstand Company: Five Legal Pitfalls for International Investors<\/strong><\/p>\n\n\n\n

Germany\u2019s Mittelstand<\/em>, comprising predominantly small and medium-sized enterprises, many family-owned, remains an attractive target for international investors. These companies combine technological expertise, established customer relationships and strong market positions. With many business owners approaching retirement, succession-driven transactions are creating additional acquisition opportunities.<\/p>\n\n\n\n

However, acquiring a German Mittelstand company involves specific legal challenges. International buyers should consider five key areas when structuring their transactions.<\/p>\n\n\n\n

1. The Seller\u2019s Role After Closing<\/strong><\/p>\n\n\n\n

In many Mittelstand companies, the selling shareholder remains closely involved in the day-to-day business. Relationships, technical know-how and strategic knowledge may be concentrated in one individual rather than fully embedded within the organisation.<\/p>\n\n\n\n

The seller\u2019s departure after closing can therefore create risks. Buyers should carefully assess key-person dependencies, undocumented know-how and related-party arrangements, including contracts, assets or intellectual property linked to the selling shareholder.<\/p>\n\n\n\n

Where such dependencies exist, appropriate transition arrangements should be agreed. These may include a defined handover period, consultancy arrangements and measures to transfer relevant know-how and business relationships to the company.<\/p>\n\n\n\n

2. German Notarisation Requires Careful Planning<\/strong><\/p>\n\n\n\n

Many Mittelstand businesses operate as limited liability companies (GmbH<\/em>). Acquisitions of shares in GmbHs generally require notarisation. For international investors, this can add an unfamiliar layer of complexity to the transaction.<\/p>\n\n\n\n

Questions may arise regarding powers of attorney, evidence of corporate authority and foreign corporate documents. Depending on the transaction structure and the documents involved, foreign documents may also require specific forms of certification or authentication before they can be used in Germany.<\/p>\n\n\n\n

International buyers should therefore involve the German notary early in the process and coordinate the signing mechanics alongside the negotiation of the transaction documents.<\/p>\n\n\n\n

3. Employment and Pension Liabilities<\/strong><\/p>\n\n\n\n

German employment law provides substantial protection for employees. In asset deals involving a transfer of an undertaking, Section 613a of the German Civil Code generally provides for the automatic transfer of existing employment relationships to the acquiring entity.<\/p>\n\n\n\n

In share deals, the employing company remains unchanged, but existing employment obligations and liabilities remain within the acquired business.<\/p>\n\n\n\n

Occupational pension commitments deserve scrutiny, especially in established family businesses where historical arrangements may create significant long-term financial exposure. Buyers should also review collective agreements, works council arrangements and employee consultation obligations.<\/p>\n\n\n\n

4. Hidden Liabilities and Limited Transparency<\/strong><\/p>\n\n\n\n

Mittelstand companies often have lean management structures and less formalised reporting processes than larger corporations, making legal due diligence particularly challenging.<\/p>\n\n\n\n

Potential risks include undocumented related-party transactions, shareholder loans, tax exposures, intellectual property ownership issues and insufficiently documented compliance procedures.<\/p>\n\n\n\n

Attention should also be paid to dependencies on selling shareholders, including personal guarantees, informal business arrangements and intellectual property held outside the target company.<\/p>\n\n\n\n

5. Foreign Investment Screening Requirements<\/strong><\/p>\n\n\n\n

International buyers must consider German foreign investment screening rules.<\/p>\n\n\n\n

Under the German Foreign Trade and Payments Ordinance (Au\u00dfenwirtschaftsverordnung<\/em>), acquisitions by non-EU investors may be subject to government review. Depending on the target’s activities, relevant voting-rights thresholds can be as low as 10 or 20 percent. Certain defence-related acquisitions are subject to separate screening rules.<\/p>\n\n\n\n

Notification requirements, review periods and closing restrictions should be assessed early, particularly for businesses in sensitive or strategically important sectors.<\/p>\n\n\n\n

Conclusion<\/strong><\/p>\n\n\n\n

Acquiring a German Mittelstand company offers considerable opportunities but requires an understanding of the legal and structural characteristics of family-owned businesses.<\/p>\n\n\n\n

Early legal due diligence, careful transaction structuring and tailored contractual protections are essential to managing risks, preserving business value and ensuring a successful acquisition.<\/p>\n","protected":false},"excerpt":{"rendered":"

Germany\u2019s Mittelstand, comprising predominantly small and medium-sized enterprises, many family-owned, remains an attractive target for international investors.<\/p>\n","protected":false},"author":9,"featured_media":10339,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[308,89,201],"tags":[],"class_list":["post-10338","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-law_ma","category-news","category-publications"],"acf":[],"_links":{"self":[{"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/posts\/10338","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/comments?post=10338"}],"version-history":[{"count":1,"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/posts\/10338\/revisions"}],"predecessor-version":[{"id":10340,"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/posts\/10338\/revisions\/10340"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/media\/10339"}],"wp:attachment":[{"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/media?parent=10338"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/categories?post=10338"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tigges.legal\/en\/wp-json\/wp\/v2\/tags?post=10338"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}