Aktiengesellschaft

Aktiengesellschaft (German pronunciation: [ˈʔakt͡si̯ənɡəˌzɛlʃaft]; abbreviated AG pronounced [ʔaːˈgeː]) is a German word for a corporation limited by share ownership (i.e. is owned by its shareholders) and may be traded on a stock market. The term is used in Germany, Austria, Switzerland, South Tyrol and for companies incorporated in the German-speaking region of Belgium. It is also used in Luxembourg, though the French-language equivalent, Société Anonyme, is more common.[1]

Meaning of the word

The German word Aktiengesellschaft is a compound noun made up of two elements: Aktien meaning shares, and Gesellschaft meaning society, or, in this context, company. Other types of German companies also have shares, although these shares are called Anteile rather than Aktien. A similar distinction exists in other languages; for example, in Polish the two types of share are called akcja and udział, in Spanish, acción and cuota or in French action and part sociale.

Legal basis

In Germany and Austria, the legal basis of the AG is the German Aktiengesetz (abbr. AktG) or the Austrian Aktiengesetz (abbr. AktG). The law requires all corporations to specify their legal form in their name which tells the public their limitation of liability, all German (required by § 4 Aktiengesetz) and Austrian stock corporations include Aktiengesellschaft or AG as part of their name, frequently as a suffix.

In Switzerland, the Company Limited by Shares (or Aktiengesellschaft in German, société anonyme in French, società anonima in Italian, societad anonima in Romansh) is defined in Title Twenty-Six of the Code of Obligations. Article 950 specifies that the business name must indicate the legal form.

Structure

German AG’s have a “two-tiered board” structure, consisting of a supervisory board (Aufsichtsrat) and a management board (Vorstand). The supervisory board is generally controlled by shareholders, although employees may have seats, depending on the size of the company. The management board directly runs the company, but its members may be removed by the supervisory board, which also determines the management board’s compensation. Some German AGs have management boards which determine their own remuneration, but that situation is now relatively uncommon.

The general meeting is the supreme governing body of a Swiss company limited by shares. It elects the board of directors (Verwaltungsrat in German) and the external auditors. The board of directors may appoint and dismiss persons entrusted with managing and representing the company.

Similar forms

Several countries have similar forms of company:

All aforementioned company forms have names that more or less literally translate to "Aktiengesellschaft" (for meaning see above), although their structures differ (for instance, an Italian S.p.A. is closer to a French S.A. than to a German AG).

The form is roughly equivalent to the “public limited company” (plc) in both Ireland and the United Kingdom, to the “publicly held/open corporation” in the United States, to the naamloze vennootschap in the Netherlands and Belgium, to the Sendirian Berhad in Malaysia, to the Perseroan Terbatas in Indonesia, to the S.A. in Spain, France, Portugal and other civil-law jurisdictions, and to the Societas Europaea in the European Union.

References

  1. ↑ "Aktiengesellschaft". Farlex. 2009. Retrieved 2011-05-10.

Further reading