A private company with limited liability is known as a Gesellschaft mit beschränkter Haftung (GmbH).
In Germany, through most of the 19th century the Kommanditgesellschaft (société en commandite in France) was the typical form of business organisation.
In 1861 the Allgemeines Deutsches Handelsgesetzbuch or the General Commercial Code for all of Germany, as well as Austria, was enacted, which devoted a section to joint stock companies.
[6] Shareholders have a list of specific rights allocated to them by the Aktiengesetz, although this is circumscribed by the general principle in AktG §119(2) that issues concerning 'business leadership' can only be determined by the executive directors.
First, the duty of loyalty, or Treuepflicht, derives from the good faith provision in the civil code (BGB §242).
A new provision, AktG §93(1) says, 'executive members have to exercise the care of an ordinary and conscientious business leader'.
Here the court is more stringent, and like the derivative claim in the UK can strike out an application if it finds reasons for it are lacking.
However, any workplace with over five people allow workers various rights through elected works councils, and if the business has over 20 staff, employees may force the management into arbitration over redundancies.
The basic difference to the law, for instance, in the UK, Sweden or the US, is that an executive directors cannot be removed directly by the members of the company (i.e. shareholders typically, and sometimes employees) but only by a second tier "supervisory" board.
The practice became utilised in most companies by the 1920s, however in the Aktiengesetz 1937, German law made it a requirement to have a supervisory board.
They can be removed by the supervisory board, but only for a "good reason" (AktG §84(3) ein wichtiger Grund).