Audits The basis for a successful strategy

Minority stockholders have a legal right to an appropriate settlement if their shares are transferred to the principal stockholder in a squeeze-out. The same applies to control agreements, profit and loss transfer agreements, and mergers. To protect minority stockholders, the law provides for an audit of appropriateness, an audit of the contract and an audit of the merger to be conducted by independent court-selected and -appointed auditors or audit firms.

As a member of the committee for business valuation and business management and of sub-committees of the Institute of German Public Auditors (Institut der Wirtschaftsprüfer – IDW), we play a decisive role in the development of German valuation standards. We have many years of practical experience in auditing business valuations and in attending appeal proceedings.

We’ll assist you with audit services as part of squeeze-outs, mergers and inter-company agreements in the following areas:

• Audits of business valuations
• Audits of the appropriateness of settlement payments, compensation and the ratio for exchanging shares
• Preparation and assistance at general meetings
• Assistance in legal proceedings concerning valuation

If other assets, and not cash, are paid into a business when increasing its capital, this is a contribution in kind. With contributions in kind, proof must be given that they are of sound value so that the amount equals the shares they are issued for. A valuation certificate is especially necessary if the company is to be formed by contributions in kind or if they are used to increase capital or in the case of a debt to equity swap.

As independent auditors, we’ll assist you with auditing company formations and capital increases, valuation certificates and debt to equity swaps.