Question : Four students decided to draft documents to incorporate a limited liability company in Germany. They want to formalise their relationship such as member of a pop band. Three of them periodically play music in pubs and bars; the fourth one helps the others in looking for the available pubs/bars, in contracting the fees with the owners, in setting up musical instruments and all the technological supports to play. They are known as "The Watchers". So, all of them effectively contributed to the band's success: the three musicians, writing new songs and playing their music; the fourth one, acting as the agent of the others.

The articles of association already drafted contain many clauses: make a synthetic report on pros and cons, make some comments about the clauses, and do it in light of the actual relationship between those guys as well as of the (desirably positive) development of their musical activities

Clauses :

1- The name of the company is " The Watchers GmbH".

2- The registered office of the company is in Mnchengladbach.

3- The first purpose of the company is the management of all the interests in the songs/music written and/or played by each shareholder of the Company while being member of the group"TheWatchers". The second purpose is the management of all the interests related to the public performances of that group, including those related to recordings, copyrights as well as any other

interest related to the image and the name of the group.- The company is authorised to take all actions required or beneficial to fulfil the company'spurpose. In particular, the company is authorised to establish branches or subsidiaries domestically and abroad, acquire or lease the same or similar companies or to participate in such companies.

4- The company is formed for an indefinite period.

5-The resolution to dissolve the company requires the consent of at least 80 per cent of the votes of

all shareholders.

11 - A shareholder may be excluded by means of a resolution passed by the other shareholders, if the Articles of Association provide for same or if the shareholder has culpably and grossly violated his shareholder duties. The exclusion shall become effective upon receipt of the exclusion resolution even if an agreement regarding the amount of the compensation has not yet been reached. The provisions of these Articles of Association regarding the compulsory assignment shall also apply mutatis mutandis at the choice of the company.

11.2 - The redemption of shares is permitted and shall be carried out by means of a resolution passed by the shareholders' meeting.

a) In place of the exclusion, or

b) If there is good cause, in particular if the shares of the relevant shareholders are pledged or insolvency proceedings have been applied for over the assets of the shareholder or if the

shareholder has applied for the opening of judicial settlement proceedings, or

c) If the company has satisfied a judgement creditor of the shareholder on the basis of enforcement