What companies with an opting-out option need to bear in mind in the event of excessive debt

For companies with an opting-out option and without an auditor, the question often arises, in the event of financial difficulties, as to what obligations apply in the event of a capital loss or excessive debt.

In principle, in the event of a capital loss, the last annual accounts must undergo a limited audit prior to approval by the general meeting. The board of directors must appoint a licensed auditor for this purpose. Waiving this audit is only possible if an application for a stay of debt enforcement is submitted. Although creditors’ waivers of priority remove the obligation to notify the court, they do not remove the audit obligation.

According to EXPERTsuisse, the same logic applies in the event of over-indebtedness, as this is understood as an ‘extended capital loss’. Consequently, a limited audit is also required in this case. If the situation remains unresolved in the following year, this may give rise to an annual audit obligation, which can quickly become a burden for the company.