Valid Conversion Despite a Later Final Balance Sheet – New Case Law Provides Clarity

Companies planning a conversion are frequently faced with the question of when the closing balance sheet must be filed with the registry court. Two recent rulings—by the Federal Court of Justice (BGH) and the Berlin Court of Appeal (KG)—now provide greater legal certainty. Both courts confirm that the filing of a conversion can be effective even if the final balance sheet is not initially available and is submitted later—even though their reasoning differs.

Legal Framework: Registration of a Transformation and Submission Requirements

In principle, every corporate transformation must be registered with the competent registry court—regardless of whether it involves a merger, demerger, or change of legal form. Pursuant to Section 17(1) of the Transformation Act (UmwG), certain documents must be submitted with this registration. One of these mandatory documents is the closing balance sheet of the transferring legal entity (Section 17(2) UmwG).

This balance sheet must be prepared as of a reporting date that is no more than eight months prior to the date of filing. It serves to present the assets being transferred in the balance sheet and is also decisive for tax purposes—for example, for the transfer date under the Transformation Tax Act (Section 2(1), Section 20(6) UmwStG).

Point of contention: Must the closing balance sheet already be available at the time of filing?

For a long time, it was a matter of dispute among legal experts and in practice whether the final balance sheet must already be available at the time of filing or whether it can be submitted later. In particular, registry courts frequently held the view that the balance sheet must already be finalized and approved—which could significantly delay a conversion.

BGH and KG Berlin with different arguments, but the same result

In a ruling dated March 18, 2025 (Case No. II ZB 1/24), the Federal Court of Justice (BGH) has now taken a clear position: The final balance sheet may also be submitted later—provided this is done promptly after the filing. According to the BGH, late submission does not constitute an obstacle to the validity of the application, but rather a remediable procedural defect that the registry court can resolve through a so-called interim order.

In contrast, the Berlin Regional Court (KG Berlin) (decision of February 20, 2025, Ref. 22 W 64/24) continues to adhere to its more restrictive stance. According to this stance, the final balance sheet must already have been prepared and approved at the time of filing.

Despite these differing rationales, however, the practical effect is consistent: the conversion remains possible even if the balance sheet is not yet available—as long as it is submitted promptly thereafter.

What does “promptly” mean? – Deadlines and practical implications

According to the BGH, the balance sheet is still considered submitted on time if it is submitted within the deadline set by the registry court—typically between four and six weeks. This deadline is granted to the company via an interim order, which represents a one-time opportunity to remedy the deficiency.

For companies, this represents a significant relief. The final balance sheet can be prepared and audited with a little more time to spare, without the conversion stalling or having to be resubmitted entirely.

Legal certainty for business practice

The BGH’s decision strengthens legal certainty for all conversion processes. Companies can rely on the fact that the application remains valid even if the final balance sheet is not yet available—provided it is submitted within a deadline set by the registry court.

This particularly facilitates complex restructurings and transactions where the balance sheet cannot be prepared at the same time as the filing.

Conclusion

The new case law regarding the submission of the closing balance sheet in the context of transformations provides a practical solution. Companies gain greater flexibility and need not fear that formal requirements will completely block the transformation.

Nevertheless, due diligence is still required: The balance sheet should be submitted promptly to avoid unnecessary delays or inquiries from the registry court. In any case, it is advisable to consult with tax and legal advisors early on to ensure the process is legally sound.