Judgment;Abstract — ECLI:EU:C:2024:1037
Date: 2024-12-19
Language of the case: German
Court formation: Grand Chamber
Subject matter: Right of establishment;Free movement of capital;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary C-295/23 – 1 
Case C-295/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
9 May 2023 
Referring court: 
Bayerischer Anwaltsgerichtshof (Germany) 
Date of the decision to refer: 
20 April 2023 
Applicant: 
Halmer Rechtsanwaltsgesellschaft UG 
Defendant: 
Rechtsanwaltskammer München 
Joined parties: 
SIVE Beratung und Beteiligung GmbH 
Dr Daniel Halmer, Rechtsanwalt 
  
Subject matter of the main proceedings 
Compatibility with EU law (Articles 49 and 63 TFEU, Directive 2006/123) of the 
requirement in German law that only lawyers and persons practising equivalent 
professions may be partners in a law company and that partners must be 
professionally active in the law company – Relevance of clauses of the company’s 
articles of association the purpose of which is to guarantee the independence of 
the management board, which is reserved for lawyers who are admitted to practise 
Subject matter and legal basis of the request 
Interpretation of EU law, Article 267 TFEU 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-295/23 
 
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Questions referred for a preliminary ruling 
The following questions are referred to the Court of Justice of the European Union 
for a preliminary ruling pursuant to Article 267 TFEU: 
2.1 Does it constitute an unlawful restriction of the right to free movement of 
capital under Article 63(1) TFEU if, under the laws of a Member State, the 
admission to practise law held by a law company must be withdrawn where 
2.1.1 a share in the law company is transferred to a person who does not 
satisfy the special professional requirements governing the acquisition 
of a share under the law of the Member State? Under those provisions, 
a share in a law company may be acquired only by a lawyer or other 
member of a bar association, a patent attorney, tax consultant, tax 
representative, auditor or certified accountant, a member of a legal 
profession from another State who is permitted to provide legal advice 
in Germany, or a patent attorney, tax consultant, tax representative, 
auditor or certified accountant of another State who is authorised to 
carry on that activity in Germany or a doctor or pharmacist; 
2.1.2 a partner satisfies the special requirements set out in point 2.1.1., but is 
not professionally active in the law company? 
2.1.3 because of the transfer of one or more shares or voting rights, the 
majority thereof are no longer held by lawyers? 
2.2 Does it constitute an unlawful restriction of the right to free movement of 
capital under Article 63(1) TFEU where a partner who is not entitled to 
practise a profession in accordance with point 2.1.1. does not have a voting 
right, even though the company’s articles of association contain clauses, in 
order to protect the independence of legal professionals and of the 
company’s legal activities, under which it is ensured that the company is 
represented as managing directors or authorised officers only by lawyers, 
partners and the partners meeting are prohibited from influencing the 
management board through instructions or indirectly through the threat of 
disadvantages, partners’ resolutions in contravention of those rules are 
rendered ineffective and the obligation of legal confidentiality is extended to 
partners and persons acting on their behalf? 
2.3 Do the restrictions referred to in points 2.1. and 2.2. satisfy the conditions 
laid down in Article 15(3)(a) to (c) of Directive 2006/123/EC of 
12 December 2006, OJ 2006 L 376, p. 36 (‘the Services Directive’), for 
permitted interferences with the freedom to provide services? 
2.4 In the event that, in the view of the Court of Justice, the applicant’s right to 
free movement of capital (points 2.1. and 2.2.) is not affected and there is no 
infringement of the Services Directive (point 2.3): 
HALMER RECHTSANWALTSGESELLSCHAFT 
 
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Is the right of the first joined party (S-GmbH) to freedom of establishment 
under Article 49 TFEU infringed by the restrictions referred to in points 2.1. 
and 2.2.? 
Provisions of European Union law relied on 
TFEU Treaty, especially Articles 49 and 63 
Directive 2006/123/EC of the European Parliament and of the Council of 
12 December 2006 on services in the internal market, especially Article 15 
Provisions of national law relied on 
Bundesrechtsanwaltsordnung (Federal Lawyers Code), in the version applicable 
up to 31 July 2022 (‘old version of the BRAO’), especially Paragraph 59a et seq. 
Bundesrechtsanwaltsordnung, in the version applicable from 1 August 2022 (‘new 
version of the BRAO’), especially Paragraph 59b et seq. 
Succinct presentation of the facts and procedure 
1 The proceedings concern the lawfulness of the revocation by the defendant of the 
applicant’s admission to practise as a law company. 
2 The applicant is a law company which is operated in the form of a limited liability 
entrepreneurial company (UG). Its managing director and sole partner was 
originally Daniel Halmer. 
3 By agreement of 31 March 2021, 51 of the 100 shares were transferred by 
Mr Halmer to S-GmbH, a limited liability company governed by Austrian law 
which is not admitted to provide legal advice either in Germany or in Austria. At 
the same time, the articles of association of the UG were amended so as to enable 
shares to be transferred to a corporation not admitted to practise law and to 
guarantee the independence of the management board, which is still reserved for 
lawyers who are admitted to practise. 
4 By letter of 19 May 2021, the defendant notified the applicant that the transfer of 
shares to S-GmbH was unlawful under the old version of the BRAO with the 
result that the applicant’s admission to practise law would have to be revoked if 
the transfer of the shares remained. 
5 The applicant notified the defendant by letter of 26 May 2021 that the transfer of 
the shares was to remain. It requested that a decision be adopted. 
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6 By decision of 9 November 2021, the applicant’s admission was revoked. An 
action was brought against that decision at the referring court on 26 November 
2021. 
The essential arguments of the parties in the main proceedings 
7 By its action, the applicant alleges that its rights are infringed by the revocation of 
the admission. It is true that the revocation is consistent with the rules of the old 
version of the BRAO, as S-GmbH is not a professional within the meaning of 
Paragraph 59a of the old version of the BRAO. The decision is nevertheless 
unlawful because those provisions infringe, inter alia, higher-ranking EU law. The 
revocation of the admission infringes in particular the applicant’s right to free 
movement of capital (Article 63(1) TFEU), S-GmbH’s right to freedom of 
establishment (Articles 49 and 54 TFEU), the applicant’s rights under Article 15 
of Directive 2006/123 and the rights enjoyed by the applicant, S-GmbH and 
Mr Halmer under Articles 15 and 16 of the Charter of Fundamental Rights of the 
European Union. 
8 The defendant submits that this is a fabricated case. The applicant has not carried 
on any legal activity. In view of the amount of its share capital of EUR 100, that is 
not to be expected. The scope of the protection offered by free movement of 
capital is not affected. The applicant may not rely on the freedom of establishment 
because the situation in question is purely national. Furthermore, the restrictions 
which led to the revocation of the admission are justified by Article 65 TFEU and 
Article 15(2)(c) and Article 15(3) of Directive 2006/123. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
National legal framework 
9 Under German law, activity as a lawyer is subject to admission by the bar 
association. Admission is granted to natural persons who are qualified for judicial 
office. In addition, companies and groupings of persons can also be admitted to 
practise the profession jointly. The law applicable at the time of the revocation of 
admission which is relevant to the assessment in the present case provided for 
significant restrictions in respect of law companies (Paragraph 59a et seq. of the 
old version of the BRAO). Under Paragraph 59a of the old version of the BRAO, 
only the persons referred to in point 2.1.1 of the questions referred for a 
preliminary ruling are authorised to practise the profession jointly. Paragraph 59c 
of the old version of the BRAO additionally authorises law companies in the form 
of corporations to practise the legal profession. Under Paragraph 59e(1) of the old 
version of the BRAO, partners in such a law company may be only lawyers and 
professionals in accordance with point 2.1.1. of the questions referred. Under the 
second sentence of Paragraph 59e(1) of the old version of the BRAO, such 
persons must, furthermore, be professionally active in the law company. Lastly, 
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persons who are not permitted to practise their profession in accordance with 
point 2.1.1. of the questions referred do not have a voting right. If the law 
company does not satisfy these requirements, it must be denied admission 
pursuant to Paragraph 59d of the old version of the BRAO. If the conditions 
subsequently cease to be met, the law company’s admission must be revoked 
(Paragraph 59h of the old version of the BRAO). The responsible bar association 
does not enjoy discretion in this regard. 
10 From 1 August 2022, Paragraph 59a et seq. of the old version of the BRAO was 
replaced by Paragraph 59b et seq. of the new version of the BRAO. The new rules 
expand the possibilities for professional collaboration for lawyers to further 
professions, but the prohibition on shareholding by third parties and the obligation 
to be active in the company continue to apply in modified form. 
11 By reason of the amendment of the articles of association and the transfer of 51% 
of the shares in the UG to S-GmbH there are a number of grounds for the 
(mandatory) revocation of admission under German law: 
– The law company now has a partner which does not carry on an activity in 
accordance with Paragraph 59a of the old version of the BRAO. 
– S-GmbH also cannot therefore be professionally active for the law company. 
– The majority of shares and voting rights are no longer held by lawyers. 
The questions referred for a preliminary ruling 
Limitation of free movement of capital 
12 The notion of free movement of capital covers all transactions related to financial 
or real capital which do not result directly from movements of goods or services. 
Those transactions include the acquisition of shares in a legal person governed by 
private law. The scope of the protection offered by the freedom of establishment is 
affected only if, through the transaction, the acquirer intends to secure his 
influence on an undertaking. Particular regard must be had in this regard to the 
amount of shares to be acquired and the structure of the articles of association 
(judgment of 20 September 2018, EV, C-685/16, EU:C:2018:743). On the basis of 
these criteria the applicant’s right to free movement of capital is restricted. S-
GmbH does obtain 51 of 100 shares and thus a majority holding. The articles of 
association ensure that S-GmbH is nevertheless unable to exert a controlling 
influence on the applicant. 
Compatibility of the restrictions resulting from Paragraph 59a et seq. of the old 
version of the BRAO with free movement of capital 
13 The applicant’s right to free movement of capital is restricted by Paragraphs 59e, 
59a and 59h of the old version of the BRAO. Those provisions preclude the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-295/23 
 
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transfer of shares in a law company to third parties. A transfer of shares is possible 
only if the acquirer is a professional within the meaning of Paragraph 59a of the 
old version of the BRAO, if he is active for the company in that capacity and if the 
majority of shares and voting rights continues to be held by lawyers. Under the 
second sentence of Paragraph 59e(2) of the old version of the BRAO, a partner 
who is not entitled to practise a profession within the meaning of Paragraph 59a of 
the old version of the BRAO does not have a voting right. Those provisions 
interfere with the applicant’s legal position. 
14 The referring court has doubts whether this interference with free movement of 
capital can be justified by Article 65 TFEU. Under Article 65(2) TFEU, rules of 
the Member States which are intended to serve the purpose of maintaining public 
policy and public security are permitted. Independence of legal advice, 
compliance with the requirement of transparency and security of professional 
confidentiality have been recognised by the Court of Justice as public policy and 
security objectives which can justify a restriction of free movement of capital 
(judgment of 2 December 2010, Jakubowska, C-225/09, EU:C:2010:729). The 
Court of Justice has not yet ruled, however, whether restrictions on shareholding 
in a law company, as provided for in Paragraphs 59a, 59e and 59h of the old 
version of the BRAO, are proportionate with a view to achieving those objectives. 
In the judgment of 21 April 2005, Commission v Greece (C-140/03, 
EU:C:2005:242, paragraph 34), it set out general conditions in this regard. The 
finding that national measures are in principle appropriate for ensuring attainment 
of the objective in the general interest pursued is not sufficient, according to that 
judgment. Furthermore, the disputed restrictions may not go beyond what is 
necessary to achieve the objective pursued. There are doubts whether the 
restrictions in Paragraphs 59a, 59e and 59h of the old version of the BRAO are 
necessary to guarantee the independence of lawyers. 
15 These doubts could be valid. The independence of the legal activities of the 
company’s managing directors and authorised representatives is guaranteed by the 
fact that, under Paragraph 59f(4) of the old version of the BRAO, partners are not 
permitted to exert influence on the lawyers’ activities relating to provision of legal 
advice, including by accepting or refusing clients. Independence may additionally 
be safeguarded by provisions in the articles of association. Such provisions are 
contained in the applicant’s articles of association. 
16 It seems questionable whether the general exclusion of third parties who do not 
practise a profession within the meaning of Paragraph 59a of the old version of the 
BRAO is necessary to ensure the independence of legal professionals. The risk 
that a partner or investor exerts influence on the management board does not 
depend on whether a partner practises a profession within the meaning of 
Paragraph 59a of the old version of the BRAO. Economic dependence of legal 
professionals can occur in the same way where a professional within the meaning 
of Paragraph 59a of the old version of the BRAO provides substantial capital for 
the company. The rule also does not protect against a lawyer being economically 
dependent on an external investor or a major client. At least where the statutory 
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rules seeking to guarantee the independence of legal professionals are, as in the 
present case, reinforced by provisions of the articles of association to protect the 
independence of the legal position of managing directors and their representatives, 
which means that the partners are not able to influence operational activities, it is 
not evident that third parties could interfere with the independence of legal advice 
to any greater extent than professionals in a law company. 
17 The principle of proportionality under EU law permits interferences with the 
fundamental freedoms laid down in the Treaties only if the restrictions serve a 
recognised public policy or general interest objective in a consistent and 
systematic manner. The restrictions must be non-discriminatory, justified by 
overriding general interests and appropriate for ensuring attainment of the 
objectives pursued and may not go beyond what is necessary to attain the 
objective pursued (judgments of 19 May 2009, Apothekerkammer des Saarlandes 
and Others, C-171/07 and C-172/07, EU:C:2009:316, and of 15 October 2015, 
Tomášová, C-168/15, EU:C:2016:602). 
18 From this point of view too, there are reservations whether Paragraphs 59a, 59e 
and 59h of the old version of the BRAO contain a consistent and systematically 
logical restriction to safeguard the independence of legal activities and the sound 
administration of justice. The legislation pursues the objective of ensuring the 
independence of legal activities by precluding shareholding in the company by 
persons with purely economic interests, by permitting only persons with 
professional ties to be members of the company and by requiring them to be active 
within the company. In principle, the restriction of the group of partners does 
mean that third parties who do not satisfy those criteria cannot exert an influence 
on the company as partners. However, this restriction does not meet the 
requirement of consistency if partners who satisfy the requirements laid down in 
Paragraph 59e of the old version of the BRAO are able to influence management 
board activities in the same manner. Paragraphs 59a and 59e of the old version of 
the BRAO do not contain any quantitative requirements governing the partners’ 
duty to contribute. It is therefore possible that a partner pursues primarily financial 
interests through his participation and contributes to achieving business objectives 
only to a lesser extent. Furthermore, it is certainly not ensured that lawyers who 
are admitted to practise and are partners in the law company contribute 
substantially to the company. 
19 The legal questions raised have not yet been clarified in the case-law of the Court 
of Justice. In its judgment of 21 April 2005, Commission v Greece (C-140/03, 
EU:C:2005:242), which concerned the freedom of establishment, it did recognise 
that the protection of public health is a legitimate objective by which the freedom 
of establishment may be restricted. The measures were not proportionate, 
however, because lesser interferences would also have been sufficient. In the 
present case, it is guaranteed by Paragraph 59f of the old version of the BRAO 
and the applicant’s articles of association that only lawyers are able to act as 
managing directors for the law company. This is consistent with what the Court of 
Justice has considered to be necessary to attain the objective of protecting public 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-295/23 
 
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health. Furthermore, those rules contain provisions which ensure the 
independence of lawyers from partners in carrying out their activities. 
20 The same conclusion can also be drawn from the judgment of 19 May 2009, 
Apothekerkammer des Saarlandes and Others (C-171/07 and C-172/07, 
EU:C:2009:316), which likewise concerns the freedom of establishment. In that 
judgment, the Court of Justice found no fault with German legislation under 
which, with a few exceptions, the operation of a pharmacy is reserved solely for 
pharmacists. The operation of a pharmacy by a corporation is therefore precluded 
in principle. The Court of Justice justified this by the particular risks and needs 
connected with the sale of medicinal products and by health-policy aspects. No 
such risks exist in respect of legal advice. In addition, by contrast with the 
operation of pharmacies, the provision of legal advice by corporations is 
permitted. This shows that in the view of the legislature too, the situation as 
regards risks is not similar. 
Infringement of the applicant’s rights under Directive 2006/123 
21 Under Article 15(2)(c) of Directive 2006/123, Member States are to examine inter 
alia whether their legal system makes access to a service activity or the exercise of 
it subject to compliance with non-discriminatory requirements which relate to the 
shareholding of a company. Under Article 15(3)(c) of the directive, restrictions 
must be proportionate. That is the case where requirements are suitable for 
securing the attainment of the objective pursued and do not go beyond what is 
necessary to attain that objective and it is not possible to replace those 
requirements with other, less restrictive measures which attain the same result. 
There are doubts whether the restrictions contained in Paragraphs 59a, 59e and 
59h of the old version of the BRAO relating to the acquisition of shares in a law 
company satisfy those requirements. 
22 The legal advice activities carried on by the applicant constitute services within 
the meaning of Article 4(1) of Directive 2006/123. That directive has direct effect 
in respect of the applicant. It can rely directly on the fact that restrictions are not 
justified by Article 15(2)(c) and (3)(c) of the directive (judgment of 30 January 
2018, X and Visser, C-360/15 and C-31/16, EU:C:2018:44, paragraph 130). For 
the reasons mentioned in paragraphs 14 to 20 above, there are serious doubts 
whether the restrictions on the acquisition of shares in a law company in 
Paragraphs 59a and 59e of the old version of the BRAO are proportionate within 
the meaning of the directive. Rather, the independence of legal activities, the 
safeguarding of the administration of justice and the obligation of legal 
confidentiality and thus confidence in the administration of justice must be 
considered to be adequately protected by the restrictions on the rights of partners 
laid down in Paragraph 59 et seq. of the old version of the BRAO and in the 
articles of association. 
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Compatibility of the restrictions resulting from Paragraph 59a et seq. of the old 
version of the BRAO with freedom of establishment 
23 If it not considered that S-GmbH does not seek to exert a controlling influence on 
the applicant’s activities and, accordingly, the applicant’s right to free movement 
of capital may be infringed, consideration must also be given, in addition to an 
infringement of Directive 2006/123, to an infringement of S-GmbH’s right to 
freedom of establishment (Article 49 TFEU). In this respect too, the interference 
in the form of the restrictions resulting from Paragraphs 59a, 59e and 59h of the 
old version of the BRAO could be disproportionate.