BERLIN, Sept. 6 (Xinhua) -- Germany's federal government will ensure that local businesses which are incorporated as private limited companies under British law do not experience disruptions to their operations after Brexit, Justice Minister Katarina Barley announced on Thursday.
Speaking to the newspaper Handelsblatt, Barley highlighted that adopting the British limited incorporation form had proven attractive to many small German companies while Britain was still a fellow European Union (EU) member. Brexit now posed a "serious challenge" to these enterprises as they faced the risk of losing the right of being based in and recognized as lawful corporate entities in Germany or elsewhere in the bloc.
According to "Handelsblatt", the government believes that between 8,000 and 10,000 companies are affected by the situation. As a consequence, the Ministry of Justice has drafted a legislative proposal which would enable businesses to transition to a different, still valid, form of legal incorporation when Britain leaves the bloc.
Barley stressed that failure to do so would have potentially significant consequences for corporate owners who faced the risk of personally shouldering complete liability for the outstanding debts of their companies.
Finance Minister Olaf Scholz (SPD) has recently warned that an increasingly likely disorderly exit of Britain from the European Union (EU) could spark a new financial crisis in Europe. As a consequence, the SPD politician recommended to business leaders to make the necessary preparations for a no-deal scenario until it was too late.
In the meanwhile, however, German Chancellor Angela Merkel (CDU) also noted on Tuesday that the Frankfurt-based German finance industry could receive a boost from a so-called "hard" Brexit. She pointed to Britain's likely loss of the right to conduct euro-clearing activities as one such instance where bankers could count Berlin's support.
"The logic speaks certainly does not speak against (a transfer from London to Frankfurt). Politically, I can easily explain that Euro-clearing must take place in the Eurozone and in that case Frankfurt is certainly an excellent location", Merkel said.
