Businesses and Consumer Protection Regulations in times of the COVID-19 pandemic
> 31 March 2020

On 25 March 2020, the German Bundestag passed a law to mitigate the consequences of the pandemic COVID 19 to protect businesses and consumers. On 27 March 2020 the Bundesrat approved the law; the law was published the same day. The regulations partly apply retroactively to 1 March 2020 and will come into force by 1 April 2020 at the latest.

Main regulations for businesses are:

Suspension of the obligation to file for insolvency:
The obligation to file for insolvency is suspended until 30 September 2020. However, this only applies if the insolvency is based on the consequences of the COVID -19 pandemic and if there are prospects of remedying an existing illiquidity. These conditions are presumed to exist if the company was not insolvent on 31 December 2019.

During this suspension, the strict liability of the manager is also suspended. The managing director is not liable for payments which are made in the ordinary course of business, in particular not for such payments which serve to maintain or resume business operations or to implement a reorganisation concept.

In addition, possibilities for insolvency contesting are being limited.

Facilitation for shareholder resolutions of GmbHs:
Deviating from the Act regarding Limited Liability Companies (GmbH-Gesetz), shareholder resolutions in 2020 may be passed in text form or by written submission of votes even without the consent of all shareholders.

Restrictions on termination of tenancies and leases:
The lessor may not terminate a lease of land or premises on the sole ground that the tenant fails to pay the rent due in the period from 1 April 2020 to 30 June 2020, if such failure is due to the effects of the pandemic COVID-19. The link between the pandemic COVID-19 and non-performance must be made credible.
> Law (German): Gesetz zur Abmilderung der Folgen der COVID-19-Pandemie im Zivil-, Insolvenz- und Strafverfahrensrecht