When Managing Directors Suddenly Become Consumers – Federal Court of Justice Strengthens Rights When Purchasing Shares on Credit
Can a loan taken out to purchase one’s own company shares be a perfectly ordinary consumer loan – even if the purchaser is a managing director of a GmbH & Co. KG and the contract looks like a ‘business loan’? And what then happens with regard to the right of withdrawal, mandatory disclosures and the bank’s terms and conditions?
In the case at hand, a managing partner of a GmbH & Co. KG had taken out a loan to repay older loans with which he had originally financed his company shares. The bank treated the entire transaction as a business loan: the title, form texts, and checking account were clearly tailored to “business purposes.”
However, the Federal Court of Justice (BGH) states clearly: What matters is not what the contract says, but the role in which the person takes out the loan. Legally, a GmbH managing partner is first and foremost an employee of the GmbH—that is, neither a merchant nor a self-employed entrepreneur. If he enters into a loan agreement in his own name, he is typically considered a consumer, unless it can be proven that the loan serves his commercial or self-employed activity.
The second point made by the BGH is important: Holding company shares is generally considered private asset management, not a commercial activity. Anyone who holds shares in “their” GmbH or GmbH & Co. KG is managing their own assets—similar to someone who owns stocks or mutual fund shares. The fact that the purchase of these shares is financed by a loan does not change this.
Consequence:
A loan taken out to acquire these company shares or to repay the financing loans for them is generally classified as a consumer loan. In that case, all protective provisions of consumer loan law apply: mandatory disclosures, rights of withdrawal, and strict requirements for standard form clauses. Particularly contentious: A contractual clause that “confirms” that one is acting as a business owner is invalid under the law governing standard terms and conditions if it is objectively false. Even the mere use of a business account as a payout account does not transform a personal loan into a business loan.
A managing director of a GmbH generally remains a consumer when acquiring his or her own company shares with a loan. The loan is therefore a consumer loan—including the right of rescission and strict consumer protection regulations.