As part of my employee compensation when I started working for a small startup, I got 5% of the shares. The company didn't make it and the founder wrote me to tell me that he's going to liquidate it, and that this will affect our credit score in Germany.

I guess it means it will appear in my Schufa Bonitätsauskunft (liquidity report) and that kind of things. How bad is it really for me? Could this credit score be transfered to other (EU) countries?

  • Presumably the fact that it will affect your credit score means that the liquidation is because of bankruptcy (as opposed to liquidating when there's still a slightly positive net worth)? – RonJohn Dec 6 '17 at 21:39
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    If the founder is feeling nice, he could offer to buy your shares from you for 1 EUR before he liquidates. – DJClayworth Dec 6 '17 at 22:06
  • @RonJohn Yes, bankruptcy. – user384729 Dec 6 '17 at 22:09
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    Are you involved with this company in any way, other than owning shares? Because if I buy shares in a company on the market, and it goes bankrupt, I don't expect my credit score to go down. – DJClayworth Dec 6 '17 at 22:23
  • A bit of a punt, but according to this link on corporate governance in Germany (#35 and 36) one (or more) shareholders who hold at least 5% get special powers to demand shareholder meetings, propose motions, and instigate various audits/legal remedies in case of suspected mismanagement. Perhaps that 5% figure also gives you some "obligations" (to have raised issues ahead of bankruptcy) and the responsibility lives on (in affecting your liquidity report) if you didn't? – TripeHound Dec 7 '17 at 16:08

In general No - owning shares of a limited company that is in liquidation should not impact your credit. However it would depend on the specific legal structure and what specifically is happening.

For example: if you were a director of an English company that was allowed the company to continue trading when it couldn't pay its debts, you could be disqualified. If it was a partnership, you would be personally liable for the debts too.

A German bankruptcy lawyer should be able to answer the question more precisely based on your specific circumstances.

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