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The Development of German Corporate Law Until 1990: An Historical Reappraisal

Published online by Cambridge University Press:  06 March 2019

Peter Muchlinski

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The development of modern corporate law can be located in four “origin” legal systems: France, England, Germany and the United States (specifically in leading State Jurisdictions such as New York, New Jersey and Delaware). These systems are often segregated between an Anglo-American “outsider” system of corporate law and governance and the Continental “insider” system. This has its political economy parallel in the “Varieties of Capitalism” literature, which separates the major capitalist economies into “Liberal Market Economies”, such as the UK and the USA, and “Co-ordinated Market Economies”, such as Germany. These distinctions concentrate, in particular, on whether the system of corporate finance is based on open stock markets and widely dispersed “outsider” shareholding, as in the Anglo-American model, or on finance carried out by “insider” universal investment banks with places on the supervisory organs of corporations as is often claimed to be the case for the German system.

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Articles
Information
German Law Journal , Volume 14 , Issue 2 , 01 February 2013 , pp. 339 - 379
Copyright
Copyright © 2013 by German Law Journal GbR 

References

1 See also Alan Dignam & Michael Galanis, The Globalization of Corporate Governance 43–45 (2010); Henry Hansmann & Reiner Kraakman, The End of History of Corporate Law, in Convergence and Persistence in Corporate Governance 33 (Jeffrey Gordon & Mark Roe eds., 2004), also published in 89 Georgetown Univ. L.R. 439 (2001).Google Scholar

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3 In France, the role of the State as financier is emphasised. See also Dignam & Galanis, supra note 1, at 46–48; Hansmann & Kraakman, supra note 1.Google Scholar

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13 In 1866, the year when Bismarck embarked on the first stage of German unification after the defeat of Austria by Prussia, there were 38 German States: see David Thomson, Europe since Napoleon 307–320 (rev. ed., 1966).Google Scholar

14 On which, see further Hans Schlosser, Grundzuge der Neuren Privatrachtsgeschichte (Outline of the recent history of private law, 9th ed., 2001), in particular, Chapter 7, Die Kodifikation des Privatrechts in Deutschland (the codification of private law in Germany); see also Zweigert & Kotz, supra note 8, at 141–154.Google Scholar

15 The classic exposition of this approach is the influential work by Karl Lehmann, Die Geschichtliche Entwiklung des Aktienrechts bis zum Code de Commerce (he Historical Development of Corporate Law up to the Code de Commerce, 1895).Google Scholar

16 See e.g., Karl Lehmann, Das Recht der Aktiengesellschaften Band 75–82 (The law of joint stock corporations, 1898). Norbert Reich also identifies the origins of German corporate law as beginning after the adoption of the Code de Commerce and its reception into various German State laws: Norbert Reich, Die Entwicklung des Deutschen Aktienrechts im Neunzehnten Jahrhundert (The development of the German Stock Corporation Law in the Nineteenth Century), IUS Commune II (1969), available at: http://data.rg.mpg.de/iuscommune/ic02_reich.pdf (last accessed: 1 February 2013). See also Coing, supra note 12, at 99.Google Scholar

17 Levy defines the societas as an association in which, “all the parties share the risks both as capitalists and as traders” while the commenda is an association in which, “one party alone undertakes the management and bears the commercial risk”: Levy, supra note 7, at 3. Levy attributes the rise of the medieval commenda to Italy where one party the tractator undertook the management of the venture, the purchase, transport and sale of the goods and was responsible to creditors, while the other partner, the commendator, provided the capital but undertook no further obligations or liability: Levy, supra note 7, at 8. See also, Lehmann, Das Recht der Aktiengesellschaften, supra note 16, at 26–28.Google Scholar

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19 Wesel, , supra note 18, at 336; Levy, supra note 7, at 9.Google Scholar

20 Levy, , supra note 7, at 11. Another example is the Ravensburg Company, which lasted from 1380 to 1530 on the basis of renewable contracts: Levy, supra note 7; Wesel, supra note 18, at 336.Google Scholar

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28 Levy, , supra note 7, at 97. For the difficulties associated with this system in Prussia, see Reich, supra note 16, at 246- 247. On unease over corporations in Prussia, see Grossfeld, supra note 12, at 122–127.Google Scholar

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32 Gesetz über Eisenbahnunternehmungen (Railway corporate law) 3.11.1838 GS fur die Koniglichen Preussichen Staaten 1838 (GS for Royal Prussian State), s. 505 (Ger.).Google Scholar

33 Reich, , supra note 16, at 250; Levy, supra note 7, at 98.Google Scholar

34 Preussiche Aktiengesetz (Prussian corporation law) 9.11.1843 GS Fur Die Konglichen Preussichen Staaten 1843, 9 Nov. 1843, Nr 31 s.341 (Gr.). The following summary draws on Reich, supra note 16, at 251; Levy, supra note 7, at 98–99, and Grossfeld, supra note 12, at 127–131. See also Gesetz uber die Aktiengesellschaften fur die Königlich Preussischen Staaten von 9 November 1843 (Law on Companies for the Royal Prussian State, Theodor Baums ed., 1981). Other German States had also adopted corporate laws at this time. Thus, the Prussian and Bavarian Rhineland Provinces, Hessen and Baden, used the Code de Commerce after 1815 and only in the Prussian Rhine Province was it supplanted by the 1843 law. Wurttemberg codified its commercial law in 1839 and followed the Dutch Commercial Code in relation to corporations. Nassau codified its commercial law in 1842: Reich, supra note 16, at 243–244; Wehler, supra note 29, at 104.Google Scholar

35 Reich, , supra note 16, at 251; Wesel, supra note 18, at 463; Coing, supra note 26, at 169.Google Scholar

36 Levy, , supra note 7, at 98–99. The basic principle behind the société en commandite is that it must comprise of at least two partners: the commandite, who is the managing partner and takes full liability for the commercial debts of the entity, and the commanditaire, who is a limited liability partner and who takes no part in the management of the undertaking. Such entities pre-date the French Code de Commerce: see Levy, supra note 7, at 55. See also Code de Commerce, Art. L 222–1 (Fr.).Google Scholar

37 See also Reich, , supra note 16, at 253–254.Google Scholar

38 Coing, , supra note 26, at 172: the Code de Commerce “Dementsprechend kannte es das Konzessionssystem; dagegwen war die Institution des Aufrichtsrates unbekannt.” Google Scholar

39 Grossfeld, , supra note 12, at 128.Google Scholar

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56 See Levy, supra note 7, at 128; Reich, supra note 16, at 267–268; Coing, supra note 26, at 173. Gesetz betreffend die Kommanditgesellschaften auf Aktien und die Aktiengesellschaften Vom 18 Juli 1884 [Aktiengesetz 1884], 18 Jul. 1884, Deutsches Reichsgesetzblatt Band 1884, Nr 22 s. 123–170 Art. 175e (Ger.): “Jede Kommanditgesellschaft auf Aktien muss einen Aufsichtsrath haben”, Art. 209f: “Jede Aktiengesellschaft muss ausser dem Vorstande einen Aufsichtsrath haben.”Google Scholar

57 Coing, , supra note 26, at 173. Some dispute exists as to how this idea was taken from French to German law with the suggestion made by Passow, rejected by Levy, that German legislators had wrongly translated the French Conseil de Surveillance literally when they only intended the supervisory organ to be an advisory body to the management board based on the German Verwaltungsrat: see Levy, supra note 7, at 129. Francks, Mayer and Wagner accept Passow's view: Julian Franks, Colin Mayer & Hannes Wagner, The Origins of the German Corporation - Finance, Ownership and Control, 10 Rev. of Fin. 537 (2006). They cite Richard Passow, Die Entstehung Des Aufsichtsrats der Aktiengesellschaft, 64 Zeitschrift fuer das gesamte Handelsrecht und Konkursrecht, 27–57 (1909), and Richard Passow, Die Aktiengesellschaft: Eine Wirtschaftswissenschaftliche Studie (The Corporation: An Economic Study, 2nd ed., 1922).Google Scholar

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60 Id. Google Scholar

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63 Gesetz betreffend die Kommanditgesellschaften auf Aktien und die Aktiengesellschaften Vom 18 Juli 1884, supra note 56, for KGaA at Arts. 175–179, for AG Arts. 207–212. 64 Id., for KGaA, Art. 173a; for AG, Art. 207a.Google Scholar

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66 Id., Arts. 249–249g.Google Scholar

67 Id., for KGaA, Arts. 185–185c; for AG, Art. 239.Google Scholar

68 Id., for KGaA, Arts 180f-180i; for AG, Arts. 215 and 215a.Google Scholar

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70 Id., for KGaA, Art. 183b; for AG, Art. 219.Google Scholar

71 Id., for KGaA, Art. 204: “die sorgfalt eines ordentlichen Geschaftsmanns anzuweden”; for the AG, Art. 226.Google Scholar

72 Id., for KGaA and AG, Art. 190 (ensuring that each shareholder has a vote in the General Meeting and larger shareholders could be subjected to limits in voting); for AG shareholder remedies, see Arts. 221–223.Google Scholar

73 Id., for KGaA, Art. 175e and Art. 191, which also applies to AGs under Art.224.Google Scholar

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75 Deutsche Handelsgesetzbuch vom 10 Mai 1897 [RGBl], 1 Jan. 1900, s. 219.Google Scholar

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77 Gerschenkron, Alexander, The Modernisation of Entrepreneurship, in Continuity in History and Other Essays (1968), at 137: “The German investment banks - a powerful invention, comparable in economic effect to that of the steam engine - were in their capital-supplying functions a substitute for the insufficiency of the previously created wealth willingly placed at the disposal of entrepreneurs.” See also Alexander Gerschenkron, The Approach to European Industrialization: A Postscript, in Economic Backwardness in Historical Perspective 353–354 (1962).Google Scholar

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79 See Fohlin, , supra note 78, at 33–34, citing Gerschenkron: [T]hrough the development of the institution of the supervisory boards to the most powerful organs within corporate organisations, the banks acquired a formidable degree of ascendancy over industrial enterprises, which extended far beyond the sphere of financial control into that of entrepreneurial and managerial decisions.” See, on the impact of the 1884 Law on corporate concentration, Norbert Reich, Auswirkungen der deutschen Aktienrechtsreform von 1884 auf die Konzentrazion der deutschen Wirtschaft, in Recht und Entwicklung der Grossunternehmen im 19. und fruhen 20 Jahrhundert; law and the Formation of Big Enterprises in the 19 and Early 20 Centuries 255–273 (Norbert Horn & Jurgen Kocha eds., 1979). See also, Norbert Horn, Aktienrechtliche Unternehmensorganisation in der Hochindustialisierung (1860-1920) Deutschland, England, Frankreich und die USA im Vergleich, in Recht und Entwicklung der Grossunternehmen im 19. und fruhen 20 Jahrhundert; Law and the Formation of Big Enterprises in the 19 and Early 20TH Centuries, 123–189 (Norbert Horn & Jurgen Kocha eds., 1979).Google Scholar

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81 Franks, , supra note 57, at 7; Fohlin, supra note 78, at 121–125.Google Scholar

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83 For detailed data on the actual numbers of bank members of supervisory boards, bank shareholding patterns in non financial firms and interlocking directorships of bank representatives, all of which, she asserts, show more limited involvement than the Gerschenkron thesis supposes, see Fohlin, supra note 78, at 43 and Chapter 5. However, not all proponents of the bank dominance thesis are convinced: see note 101, infra. Google Scholar

84 Edwards, , supra note 80, at 436.Google Scholar

85 See also, Richard Deeg, On the Development of Universal Banking in Germany, in The Origins of National Financial Systems: Alexander Gerschenkron Reconsidered 87 (Douglas Forsyth & Daniel Verdier eds., 2003).Google Scholar

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87 Id. at 437–440.Google Scholar

88 See Wehler, supra note 58, at 630; see also Levy, supra note 7, at 128, 142–145, who notes that supervisory boards were not very effective at control over managers and that managers acquired the upper hand over the aufsichtsrat and the generalversammelung. Google Scholar

89 Neuburger, Hugh, The Industrial Politics of the Kreditbanken, 1880-1914, 51 Bus. Hist. Rev. 190 (1977).Google Scholar

90 Edwards, , supra note 80, at 440.Google Scholar

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92 See Fohlin, , supra note 78, at 45, citing Jacob Reisser, die deutschen grossbanken und ihre Konzentration (The German banks and their concentration, 1910), who was a director of one of the universal banks, Otto Jeidels, Das Verhaltnis der deutschen Grossbanken zur Industire (The relationship of German banks for industry, 1905), who was a bank employee, and Hilferding, supra note 78. For criticisms of Hilferding's analysis, see Wehler, supra note 58, at 630; see also, Neuberger, supra note 89, who doubts that the evidence of the “dictatorship of the banks” asserted by Hilferding and Gerschenkron can survive empirical analysis. Subsequent research has proved him correct.Google Scholar

93 Fohlin, , supra note 78, at 41–43, and the sources cited therein.Google Scholar

94 See e.g., Fohlin, , supra note 78, and Caroline Fohlin, Does Civil Law Tradition and Universal Banking Crowd out Securities Markets?, 8(3) Enterprise and SOC. 602 (2007).Google Scholar

95 Franks, , supra note 57, at 4–5. See further, Wolfgang Schultz, Das Deutsche Borsengesetz: die Entstehungsgeschichte und Wirtschaflichen Auswirkungen des Borsengesetzes von 1896 (The German Stock Exchange Act: The History and Economic Impact of the Exchange Act, 1994); for a critical contemporary appraisal, see Ernst Loeb, The German Exchange Act of 1896, 11 The Qtr'ly J. of Econ. 388 (1897), available at: http://www.jstor.org/stable/1880717?origin=JSTOR-pdf (last accessed: 1 February 2013).Google Scholar

96 Fohlin, , supra note 94, at 615.Google Scholar

97 Id. Google Scholar

98 Fohlin, , supra note 78, at 232.Google Scholar

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100 Id. at 618.Google Scholar

101 See further, the critique of Fohlin's views by Dyke, Alexander, in his response to Caroline Fohlin, The History of Corporate Ownership and Control in Germany, in A History of Corporate Governance around the World: Family Business Groups to Professional Managers 277–281 (Randall Morck ed., 2005).Google Scholar

102 See further Leslie Hannah, Mergers Cartels and Concentration: Legal Factors in the US and European Experience, in Horn, supra note 78, at 306–316.Google Scholar

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104 See Peter Muchlinski, Multinational Enterprises and the Law 35 (2007).Google Scholar

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106 Gesetz betreffend die Kommanditgesellschaften auf Aktien und die Aktiengesellschaften Vom 18 Juli 1884, supra note 56; for KGaA, Art. 179; for AG, Art. 212.Google Scholar

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111 See further von Hein, supra note 76 at 143, who argues that the reforms of 1870 and 1884 were typical products of liberalism based on private law principles that were compatible with the basic premises that informed English and French law of the time. To have considered these laws as interventionist at that time would have appeared as a relapse into the concession system which they had been adopted to replace. In a similar vein, see F.A. Mann, The New German Company Law and its Background, 19 J. Comp. Legis. & Int'l L. 3d ser. 220, at 223 (1937). See also Richard Overy, State and Industry in Germany in the Twentieth Century, 12(2) German History 180 (1994), who notes (at 181) that in the period from the late 19th century to 1916, “[t]he state certainly interfered more in German economic life than was the case in Britain or the United States, but the gap should not be exaggerated. Industry did much of its own regulating, through cartels and trusts. When war broke out in 1914, it was industry that took up the challenge of war production…Up to 1916 the domestic war economy was still left mainly to private initiative. “ For the argument that the reform of 1884 represented a non-liberal position, see Shawn Donnelly, Andrew Gamble, Gregory Jackson & John Parkinson, The Public Interest and the Company in Britain and Germany 13–16 (2000), available at: http://www.agf.org.uk/cms/upload/pdfs/CR/2000_CR1215_e_public_interest_and_the_company.pdf (last accessed: 1 February 2013).Google Scholar

112 Fohlin, , supra note 94, at 609–611.Google Scholar

113 Gesetz Betreffend die Gesellschaften mit Beschrankter Haftung vom 20 April 1892 (Law Concerning Private Limited Companies, 20 April 1892) [Gmbh Gesetz 1892], 20 Apr. 1892, as amended, available at: http://www.gesetze-im-internet.de/bundesrecht/gmbhg/gesamt.pdf (last accessed: 1 February 2013). For a useful brief summary, see Coing, supra note 12, at 127–130.Google Scholar

114 Gmbh Gesetz 1892, supra note 113, Art. 13.Google Scholar

115 See Andenas & Wooldridge, supra note 10, at 116, and further, for an account of the origins of the GmbH, see Timothy Guinnane, Ron Harris, Naomi Lamoreaux & Jean-Laurent Rosenthal, Putting the Corporation in its Place, 8(3) Enter. and Soc'y 687, 697–703 (2007). They stress the difficulties of incorporation under the 1884 Law as a factor in the development of the GmbH. Perhaps, the answer lies in the nature of German business ownership of the time and in the continued importance of family owned enterprises and of smaller entities that did not need, or want, the AG form but wanted limited liability.Google Scholar

116 See e.g., Bundesverband der Deutschen Industrie e. V. [BDI] [Federation of German Industries], Major family businesses in Germany Facts, figures, potential 21 (2012), available at: http://www.ifmbonn.org/assets/documents/BDI-major-family-businesses-Spring-2012.pdf (last accessed: 1 February 2013); family run GmbH's may have a supervisory board due to provisions in the company contract or as a result of the requirements of the Co-determination Laws.Google Scholar

117 See also Guinnane, , supra note 115, undertaking a comparative study of the development of private limited liability corporations in the UK, US, France and Germany. On the 19th century figures, see Edwards, supra note 80. Contemporary figures show that the SME sector still dominates the German economy. According to the German Federal Ministry of Economics and Technology, “Small and medium-sized companies in Germany represent 99.7% of all businesses, produce 38% of taxable turnover, account for nearly 49% of total net value added by companies, and provide roughly 60% of all jobs requiring social insurance contributions.” See Federal Ministry of Economics and Technology, Policy for small and medium-sized businesses (2012), available at: http://www.bmwi.de/English/Navigation/Economic-policy/small-business-policy.html (last accessed: 1 February 2013).Google Scholar

118 Verordnung des Reichspresidanten uber Akteinrecht, Bankenaussichtt und uber die Steueramnestie vom 19 September 1931 Reichsgesetzblatt [RGBl], 19 Sep. 1931, Historische Rechts- und Gesetzestexte Online Osterreichische Nationalbibliotek, Teil 1 Nr.63 s.493, ALEX available at: http://alex.onb.ac.at/cgicontent/alex?aid=dra&datum=1931&page=591&size=45 (last accessed: 1 February 2013). More generally, see Richard Rosendorff, The New German Company Act and the English Companies Act 1929, Part I, 14 J. Comp. Legis. & Int'l L. 3d ser. 94 (1932), Richard Rosendorff, The New German Company Act and the English Companies Act 1929, Part II, 15 J. Comp. Legis. & Int'l L. 3d ser. 112 (1933); Richard Rosendorff, The New German Company Act and the English Companies Act 1929, Part III, 15 J. Comp. Legis. & Int'l L. 3d ser. 242 (1933).Google Scholar

119 Gesetz uber Aktiengesellschaften und Kommanditgesellschaften auf Aktien (Aktiengesetz) vom 30 Januar 1937 Reichsgesetzblatt (RGBl), 30 Jan. 1937, Historische Rechts- und Gesetzestexte Online Osterreichische Nationalbibliotek (Ger.), Teil 1 Nr. 15 s. 107, ALEX available at: http://alex.onb.ac.at/cgicontent/alex?aid=dra&datum=1937&page=213&size=45 (last accessed: 1 February 2013).Google Scholar

120 See Hans-Ulrich Wehler, Deutsche Gesellschaftsgeschichte Band 4 1914–1949 (History of German Society, Volume 4, 3rd ed., 2008) at 47–52 on which this account draws. On the impact of this policy on Schering AG, see Christopher Kobrak, Politics, Corporate Governance and the Dynamics of German Managerial Innovation: Schering AG between the Wars, 3 Enter. and Soc'y 429, 438 (2002).Google Scholar

121 See Wehler, , supra note 120, at 52–54, who feels that this led to a sharpening of distributional conflicts that fuelled the abortive socialist revolution at the end of the war.Google Scholar

122 Id. at 57.Google Scholar

123 Walter Rathenau, Vom Aktienwesen: eine Geschichtliche Betrachtung (1918).Google Scholar

124 Id. at 13–33.Google Scholar

125 According to Rathenau, “die Grossunternehmung ist heute uberhaupt nicht mehr lediglich ein Gebilde privatrechtlicher Interessen, sie ist vielmehr, sowohl einzeln wie in ihrer Gesamtzhal, ein nationaliwirschaftlicher, der Gesammtheit angehoriger Faktor, der zwar aus feiner herkunft, zu Recht oder zu Unrecht, noch die privatrechlichen Zuge des reinen Erwerbsunternehmens tragt, wahrend er langst und in steigendem Masse offentlichen Interessen dienseitbar geworden ist und hierdurch sich ein neues Dasainreacht geschoffen hat.” Rathaneau, supra note 123, at 38–39:Google Scholar

126 Id. at 41, 62. This approach has acquired the label “unternehmen an sich”, given by Haussmann when he commented on Rathenau's famous rhetorical example of the risk that the Deutsche Bank could be overvalued and then forced into liquidation by the general meeting, saying that Rathenau had posited the need for the enterprise to secure the undertaking for itself against the majority of the general meeting: “Schutz des Unternehmens an sich gegenuber der Mehrheit in der Generalversammlung.” See von Hein, supra note 76, at 140, citing Fritz Haussman, Vom Aktienwesen und Aktienrecht 14, 27 (1928).Google Scholar

127 von Hein, supra note 76; Mann, supra note 111, at 226–227, who links Rathenau's ideas with the 1937 Law.Google Scholar

128 von Hein, supra note 76, at 141–142, citing Geiler.Google Scholar

129 For a detailed analysis of the process and of the role played by US ideas, see id. at 126–169; see also Rosendorff, Part I, supra note 118, at 95. The DJT discussions of 1926 and 1928 are documented in Quellen fur Aktienrechtsreform der Weimarer Republic 1926–31, Vol. 1, 33–205 (Werner Schubert ed., 1999); the work of the Ministry of Justice is documented therein, at 207–442.Google Scholar

130 Rosendorff, , Part I, supra note 118.Google Scholar

131 See Levy, , supra note 7, at 168–169; Fohlin, supra note 78, at 299.Google Scholar

132 Levy, , supra note 7, at 169–170; Fohlin, supra note 101, at 262.Google Scholar

133 Levy, , supra note 7; see further von Hein, supra note 76, at 149–157.Google Scholar

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135 Verordnung des Reichspresidanten uber Akteinrecht, Bankenaussichtt und uber die Steueramnestie vom 19 September 1931 Reichsgesetzblatt, supra note 118, Arts. V and VI.Google Scholar

136 Rosendorff, , Part III, supra note 118, at 242–246.Google Scholar

137 Fohlin, , supra note 101, at 262–263. See Gesetz uber Aktiengesellschaften und Kommanditgesellschaften auf Aktien (Aktiengesetz) vom 30 Januar 1937 Reichsgesetzblatt (RGBl), supra note 119, Arts. 159–168 on pre-emptive rights; Arts. 169–173, allowing special issue of shares without permission of stockholders for up to five years; Art. 174, specific permission of stockholders and the Reich Ministry of Economics needed in specific cases of issues of convertible and participating bonds. Further, see Mann, supra note 111, at 235–237.Google Scholar

138 Verordnung des Reichspresidanten uber Akteinrecht, Bankenaussichtt und uber die Steueramnestie vom 19 September 1931 Reichsgesetzblatt, supra note, 118 Art.1(1) new s. 227 HGB; see also, Rosendorff, Part III, supra note 118 at 248–249. This was carried through to the 1937 Law: see Mann, supra note 111, at 237–238.Google Scholar

139 Verordnung des Reichspresidanten uber Akteinrecht, Bankenaussichtt und uber die Steueramnestie vom 19 September 1931 Reichsgesetzblatt, supra note 118, at Art. VII new s.266(3) HGB.Google Scholar

140 Rosendorff, , Part II, supra note 118, at 112.Google Scholar

141 See von Hein, supra note 76, at 161–163; Rosendorff, Part I, supra note 118, at 98–100.Google Scholar

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143 Rosendorff, , Part I, supra note 118.Google Scholar

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147 See von Hein, supra note 76, at 172. See further, Kobrak, supra note 120. On Nazi privatisations, see Germa Bel, Against the Mainstream: Nazi Privatisation in 1930s Germany, 63(1) Econ. Hist. Rev. 34 (1210). According to Overy, state ownership became much more widespread during the Second World War particularly in sectors related to armaments and strategic industries: Overy, supra note 111, at 184. For example, the Reichswerke, set up in 1937 by Goering, Hermann, grew into a vast state holding company in iron ore mining, iron and steel, and armaments.Google Scholar

148 This includes a minimum capital on formation of 500,000 Reichsmarks (Art. 7); no shares issued without a minimum par value of at least 1000 Reichsmarks (Arts. 6 and 8); see Mann, supra note 111, at 227–228.Google Scholar

149 This includes more information about corporate members (Arts. 100 and 128), more information for shareholders (Art. 112), and more details about group ownership structures as well as membership of cartels (Art.128 (8) and (9)); See Mann, supra note 111, at 231–233.Google Scholar

150 See Kessler, William, The German Corporation Law of 1937, 28(4) Am. Econ. Rev 653 (1938).Google Scholar

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152 By Art. 70: “(1) Der vorstand hat unter eigener Verantwortung die Gesellschaft so zu leiten, wie dass Wohl des Betriebes und seiner Gefolgschaft und der gemeine Nutzen von Volk und Reich es forderen.”Google Scholar

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162 Id.; see also Overy, supra note 111, at 182, 184. But see the Volkswagen privatisation law which allowed the State of Lower Saxony to retain control over the new firm through controlling a fifth of all shares. This law was successfully challenged under EU law in 2007: see Peer Zumbansen & Daniel Saam, The ECJ, Volkswagen and European Corporate Law: Reshaping the European Varieties of Capitalism, 8 Germ. L. J. 1026 (2007).Google Scholar

163 See further, Mary Fulbrook, A Concise History of Germany 204–212(2nd ed., 2004).Google Scholar

164 Id., at 235–238. On the rise and fall of the centrally planned GDR economy, see Hans-Ulrich Wehler, Deutsche Gesellschaftsgeschichte Band 5 1949 – 1990, 88–107 (History of German Society, Volume 5, 2008).Google Scholar

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170 For an English summary of German Ordoliberal views from the period, see Carl Friedrich, The Political Thought of Neo-Liberalism, 49 Am. Pol. Sci. Rev. 509 (1965); Kurt Hanslowe, Neo-liberalism an Analysis and Proposed Application, 9 J. Pub. L. 96, 97–102 (1960). See also Razeen Sally, Classical Liberalism and International Economic Order (1998), Chapter 6, “Ordoliberalism and the Social Market.” For a recent examination, see Ralf Ptak, Neoliberalism in Germany: Revisiting the Ordoliberal Foundations of the Social Market Economy, in The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective 98 (Philip Mirowski & Dieter Plehwe eds., 2009). In German, see Nörr, Teil 1, supra note 11, Chapter 4. The main organ of the ordoliberal movement is the journal Ordo: Jahrbuch fur die Ordnung von Wirtschaft und Gesellschaft (Yearbook of Business & Society), available online at: http://www.ordo-jahrbuch.de/en/available-volumes.html (last accessed: 1 February 2013).Google Scholar

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172 See Du Plessis et al., supra note 10, at 154–155; Gregory Jackson, Contested Boundaries: Ambiguity and Creativity in the Evolution of German Codetermination 13 (RIETI Discussion Paper Series No. 04-E-022, 2004), available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=569541 (last accessed: 1 February 2013); Donnelly et. al., supra note 111, at 18–21, discussing early forms of worker participation in the 19th century German coal industry and in war industries during World War I.Google Scholar

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177 Mitbestimmungsgesetz vom 4. Mai 1976, 4 May 1976, BGBl I S. 1153, Arts. 1, 7; German version available at: http://bundesrecht.juris.de/bundesrecht/mitbestg/gesamt.pdf (last accessed: 1 February 2013). For analysis of the background to the 1976 reforms, see Heinz Hartmann, Codetermination Today and Tomorrow, 13(1) Brit. J. Ind. Rel 54 (1975); Nörr, Teil 2, supra note 11, at Chapter 6.Google Scholar

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182 See Aktiengesetz vom 6 September 1965, supra note 180, Arts. 17–18, 291–323; see Nörr, Teil 1, supra note 11, at 253–256. In 1985, these rules were extended by the Federal Supreme Court to GmbH based groups in the Autokran judgment: see Nörr, Teil 2, supra note 11, at 257–258. For a more recent analysis, see Rene Reich-Graefe, Changing Paradigms: The Liability of Corporate Groups in Germany, 37 Conn. L. R. 785 (2005).Google Scholar

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191 See further Wasmuth, Johannes, The Reunification Treaty between the Federal Republic of Germany and the German Democratic Republic and its effects on commercial, company and bankruptcy law, 1991 Int'l Bus. L. J. 765 (1991), who lists the following types of entities: “volkseigene Kombinate” (peoples’ combines), “Kombinatsbetriebe” (combine enterprises) and “volkseigene Betriebe” (peoples’ enterprises).Google Scholar

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