Pooling Agreement

What is a pooling agreement?

A pooling agreement (Poolvertrag) is a contract in which shareholders of a GmbH (German limited liability company) or an Aktiengesellschaft (German stock corporation) undertake to exercise their voting rights uniformly and to dispose of their shares only uniformly or within the group. Also in use are the terms pooling arrangement (Poolvereinbarung), voting pool (Stimmrechtspool) and voting and pooling agreement (Stimmbindungs- und Poolvertrag). Disposing here means above all selling or gifting: the members pass on their shares only jointly or to other bound shareholders. At the shareholders' meeting they thereby act like a single shareholder with a joint block of votes.

Pooling agreements are found mainly in family businesses and in business succession. Their most common occasion is inheritance and gift tax. Shares in corporations qualify for tax relief, that is, are wholly or largely exempt from tax, only if the testator or donor held more than 25%. Pool members may add their shares together to reach this threshold. Legally, the pool is generally a partnership under the German Civil Code (Gesellschaft bürgerlichen Rechts, GbR) without assets of its own, a so-called internal partnership (Innengesellschaft).

Tax background: minimum shareholding and the pooling rule

Under Section 13b(1) no. 3 of the German Inheritance and Gift Tax Act (Erbschaftsteuer- und Schenkungsteuergesetz, ErbStG), shares in a corporation with its registered office or place of management in the EU or the EEA count as qualifying assets only on one condition. The testator or donor must have held directly more than 25% of the nominal capital, in the case of a GmbH the share capital (Stammkapital). For qualifying assets, the business relief discount (Verschonungsabschlag) comes into consideration, a deduction from the taxable value: 85% under the standard relief or 100% under the optional full relief, provided the further conditions are met. If the shareholding is 25% or less and is held as private assets, it is taxed without relief. For interests in partnerships, no minimum shareholding applies; a pool is not required for this purpose there.

The pooling rule in Section 13b(1) no. 3 sentence 2 ErbStG permits aggregation if the testator or donor and the other shareholders have agreed two things among themselves. First: to dispose of the shares only uniformly or to transfer them exclusively to other shareholders who are subject to the same obligation. Second: to exercise voting rights uniformly towards shareholders who are not bound. Both elements must exist at the time of the transfer.

The relief is tied to a holding period (Behaltensfrist), five years under the standard relief and seven years under the optional full relief. If the restriction on disposal or the pooling of voting rights is cancelled within this period, the relief discount lapses retroactively (Section 13a(6) sentence 1 no. 5 ErbStG). The lapse is pro rata: it corresponds to the ratio of the remaining holding period, including the year of cancellation, to the entire period (Section 13a(6) sentence 2 ErbStG). In practice, the acquirer therefore joins the pool. The relief rules have been amended several times; the version applicable when the tax arises is decisive. Whether the relief for business assets is constitutional is being heard by the Federal Constitutional Court (Bundesverfassungsgericht) in October 2026; until it rules, the existing rules apply.

Contents of a pooling agreement

• Pooling of voting rights: The pool members vote internally before each shareholders' meeting and undertake to implement the result uniformly, often through a joint representative or a pool spokesperson.
• Majorities within the pool: simple majority for ongoing matters, qualified majority for fundamental decisions such as capital measures or a sale.
• Restriction on disposal: transfers only to other pool members or to acquirers who join the pool, accompanied by rights of first refusal or tender obligations, that is, the duty to offer shares first to the other members.
• Accession of heirs and donees: the obligation to bind legal successors to the pool.
• Term and termination: a fixed term that covers at least the holding period, and the exclusion of ordinary termination for this period.
• Withdrawal, expulsion and sanctions: grounds, procedure, compensation and contractual penalties for breaches.

The agreement is in principle not subject to any formal requirement. If it contains obligations to transfer GmbH shares, such as tender obligations, it requires notarial recording under Section 15(4) of the German Limited Liability Companies Act (GmbH-Gesetz, GmbHG). A complete written version is customary as evidence for the tax office.

Pooling agreements, venture financing and company sales

In funding rounds, a different form of voting commitment is common, the Voting Agreement. It implements investor rights and exit rules but contains no restriction on disposal within the meaning of the pooling rule and pursues no inheritance tax purpose. The pooling agreement nevertheless affects growth companies. Founders whose shareholding has fallen to 25% or less after several rounds no longer reach, on their own, the minimum shareholding for a transfer to the next generation. A pool with co-founders is then one possible route.

Anyone who holds a stake through their own holding GmbH meets the same question one level down. If the holding company holds 25% or less of the operating company, this shareholding generally counts, at the level of the holding company, as administrative assets, which are excluded from relief. Here too, a pooling arrangement can overcome the threshold (Section 13b(4) no. 2 ErbStG). Whether a pooling commitment is compatible with the rules on disposals in a shareholders' agreement, for example with Drag-Along Rights, must be examined for tax purposes in each individual case.

In a company sale, the pool decides whether its members sell uniformly. It can enable a sale, because the pool majority binds all members, or block it if the internal majority is lacking. If pool members acquired their shares with tax relief and sell them within the holding period, the disposal triggers a retroactive tax charge; this burden belongs in the sellers' net proceeds calculation.

Worked example: inheritance and gift tax with and without a pooling agreement

Four siblings each hold 20% of a software GmbH; the remaining 20% is held by a financial investor. One sister transfers her shareholding, with a taxable value of EUR 4 million, to her daughter, with no earlier gifts. The daughter joins the pool. For simplicity, all assets are treated as qualifying, and the other conditions of the standard relief are met (legal position as of 2026).

• Without a pool: shareholding of 20%, minimum shareholding not reached, no relief
• Taxable acquisition without a pool: EUR 4,000,000 minus EUR 400,000 allowance for children = EUR 3,600,000
• Tax without a pool in tax class I at 19% (rate for acquisitions above EUR 600,000 up to EUR 6 million): EUR 684,000
• With a pool of the four siblings: 4 × 20% = 80%, minimum shareholding reached
• Relief discount: EUR 4,000,000 × 85% = EUR 3,400,000 remain tax-free, EUR 600,000 remain
• Deduction amount (an additional deduction for smaller qualifying acquisitions, which phases out above EUR 150,000): 150,000 minus 50% of (600,000 minus 150,000) = 150,000 minus 225,000, that is, EUR 0
• After the allowance: 600,000 minus 400,000 = EUR 200,000, tax at 11% (rate for acquisitions above EUR 75,000 up to EUR 300,000): EUR 22,000
• Difference: 684,000 minus 22,000 = EUR 662,000
• Dissolution of the pool in the third year of the five-year period: lapse of three fifths of the discount, 3,400,000 × 3/5 = EUR 2,040,000, remaining discount EUR 1,360,000
• Tax after the dissolution: (4,000,000 minus 1,360,000 minus 400,000) × 19% = EUR 425,600

Without a pool, the daughter bears tax of around 17% of the transferred value, with a pool a little over 0.5%. The advantage presupposes that the pool and the shareholding remain in place during the holding period and that the payroll rule (Lohnsummenregel) is observed. Under this rule, the total of salaries in the company must not fall below a statutory minimum during this time. If the pool dissolves in the third year, the saving shrinks from EUR 662,000 to EUR 258,400.

Distinctions: pooling agreement, voting agreement, transfer restriction and holding company

• Voting Agreement: voting commitment without a restriction on disposal, typical for venture rounds. On its own it is not sufficient for aggregation under inheritance tax law.
• Transfer restriction in the articles of association (Vinkulierung): makes share transfers dependent on consent and binds all shareholders. The pool binds only its members but also regulates voting behaviour.
• Family constitution: describes the values and principles of a business family but is mostly not legally binding. The pooling agreement is an enforceable contract.
• Joint holding company: pools shares under company law rather than by contract (holding structure). Whether it leads to the same result for tax purposes depends on legal form, size of shareholding and structuring.

Common mistakes

• Only one element regulated. A voting commitment without a restriction on disposal, or the reverse, does not satisfy the pooling rule.
• Pool concluded only after the transfer. The commitment must exist when the tax arises; a subsequent agreement has no retroactive effect.
• Term shorter than the holding period. If the pool ends before the period expires or can be terminated at any time, the relief is subject to an avoidable reservation.
• No rule for disagreement. Without a majority rule in the pool, a single member can prevent any uniform vote.
• Acquirer not obliged to join. Without an obligation to join, the pooling ends for transferred shares and the relief for the acquirer is at risk.

Frequently asked questions

From what shareholding does a shareholder need a pooling agreement?

If the shareholder directly holds at most 25% of a corporation, holds the shares as private assets and the shares are to be transferred with inheritance tax relief. Anyone who holds more than 25% meets the minimum shareholding alone.

Is there a template for a pooling agreement?

Yes, form books and notaries have templates available, but they provide only the framework. For tax purposes, a pooling agreement works only if it contains both elements of the pooling rule, runs at least for the holding period and obliges heirs and donees to join. Its rules must also fit the articles of association and any existing shareholders' agreement.

Does a pooling agreement have to be notarised?

Only if it contains obligations to transfer GmbH shares, such as tender or purchase obligations. A pure pooling of voting rights with a consent requirement for disposals is not subject to any formal requirement but should be recorded in writing.

Can venture capital investors join a pool?

Legally yes, in practice rarely. Investors need the freedom to sell their shares at exit and do not accept a lasting commitment to the voting behaviour of a family or a founder group.

What happens if the pool is dissolved before the holding period expires?

The relief discount lapses retroactively, but only pro rata for the remainder of the holding period, including the year of dissolution; to that extent the tax is assessed after the fact. This also applies if only the restriction on disposal or only the pooling of voting rights is cancelled.

Does the minimum shareholding also apply to interests in a GmbH & Co. KG?

No. Interests in a trading or commercially structured partnership (Personengesellschaft), which includes a GmbH & Co. KG, can qualify for relief without a minimum shareholding. The 25% threshold concerns only shares in corporations.

The Roemer Capital view

In succession mandates, Roemer Capital reads an existing pooling agreement before discussing sale structure or timetable. It determines whether shares can be sold, whose consent is needed and whether a sale within the holding period triggers a retroactive tax charge. The tax assessment is provided by the family's tax adviser; Roemer Capital carries it into the net proceeds calculation and into the planning of a sale process, which experience shows takes 6 to 12 months.

In funding rounds, Roemer Capital asks early whether pooling or voting commitments exist between existing shareholders. Such commitments shift majorities and blocking minorities and therefore belong openly in the data room, rather than first coming to light in due diligence.