With three landmark decisions on November 26, 2024 (Case Nos. 1 ABR 37/20, 1 ABR 3/23, and 1 ABR 6/23), the Federal Labour Court (BAG) has established clear conditions: European public limited-liability companies (SEs – Societas Europaea) that do not employ staff at the time of their incorporation are not subject to the obligation to carry out retroactive employee participation procedures, even if personnel are hired or assigned later.
This decision creates significant planning and legal certainty for entrepreneurs and investors whose investment decisions depend on structures free from codetermination.
Advantages at a glance:
- No obligation for retroactive codetermination upon subsequent hiring of employees
- Reduced transaction costs for M&A and IPOs
- Time advantage due to the elimination of complex participation procedures
- Codetermination-free corporate structure is maintained – even in the event of subsequent expansion
According to the BAG, the prohibition of abuse under Section 43 of the SE Implementation Act (SEBG) also applies only under narrow conditions. Even in cases of abuse, the court holds that there is no obligation to retroactively introduce codetermination – a significant signal for the structuring of SEs in dynamic markets.
The current BAG rulings position stock-exchange-listed SEs, which were employee-free at incorporation, as particularly attractive platforms for IPOs, company acquisitions, and strategic realignments – with a clear advantage in flexibility, efficiency, and legal certainty.
Instant IPO also relies on SE shell companies that exactly meet the requirements of the current BAG jurisprudence. The shell companies offered were incorporated without codetermination and fulfill the requirements to be acquired and operated permanently without any obligation for retroactive codetermination. Thus, Instant IPO offers not only a legally robust structure but also a particularly fast and efficient one for IPOs and company takeovers – entirely in line with the labor law clarification provided by the BAG.
About INSTANT IPO SE:
INSTANT IPO is the first independent specialist in Europe focusing on fast stock market launches and is the market leader for shell companies in Germany.
As an official capital market partner of the Düsseldorf Stock Exchange, INSTANT IPO implements individual, time- and cost-efficient stock market launches for companies in every sector. Beyond the implementation of traditional IPOs or pure listings, INSTANT IPO's special expertise lies in the segment of shell company/SPAC transactions (Reverse IPO, Reverse Merger, or Reverse Takeover, Cold IPO), as shell companies offer significant advantages to companies striving to go public.