Glossary · Governance and representation

Managing director (Geschäftsführer)

Also: Geschäftsführer, director, CEO of a GmbH

In short

The managing director runs the GmbH or UG and represents it in and out of court. They must be a natural person with full legal capacity and are appointed by the shareholders.

Managing director (Geschäftsführer) explained

Every GmbH needs at least one managing director (Sec. 6 (1) GmbHG); this can be a shareholder or an external managing director. Excluded, for example, is anyone convicted of intentionally delaying insolvency, for five years from the judgment becoming final (Sec. 6 (2) GmbHG). Internally, the shareholders have the final say: they appoint and dismiss the managing director (Sec. 38, 46 no. 5 GmbHG) and can give instructions (Sec. 37 (1) GmbHG). Externally, such restrictions do not apply (Sec. 37 (2) GmbHG). Unless otherwise provided, several managing directors can only represent the company jointly (Sec. 35 (2) GmbHG). The managing director is liable to the company for breaches of duty (Sec. 43 GmbHG).

Legal basisSec. 6, 35, 37, 38, 43, 46 no. 5 GmbHG

More in our guideWhat is a GmbH? Meaning and key features explained simplyGmbH stands for Gesellschaft mit beschränkter Haftung, a German limited liability company. It is a corporation and a legal entity in its own right, formed by one or more persons with at least €25,000 in share capital, of which at least €12,500 must be paid in before registration (Sec. 5 and 7 GmbHG). Once the GmbH is entered in the commercial register, only the company's assets are in principle liable for its debts (Sec. 13 (2) GmbHG).Read the guide

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Related terms

External managing director (Fremdgeschäftsführer)An external managing director runs a GmbH or UG without holding a share in it. They are appointed by the shareholders and are subject to their instructions.GmbH (limited liability company)The GmbH is a corporation and legal entity formed by one or more persons with at least €25,000 share capital. As soon as it is entered in the commercial register, in principle only the company's assets are liable for its debts.Commercial power of attorney (Handlungsvollmacht)The commercial power of attorney authorises the transactions and legal acts that a commercial business, or certain transactions within it, usually involve. It is narrower than Prokura and is not entered in the commercial register.Exemption from Sec. 181 BGBThe exemption from Sec. 181 BGB allows a managing director to conclude contracts on behalf of the company with themselves or with a third party they also represent. Without this permission, such self-dealing transactions are generally not allowed.General partner (Komplementär)The general partner is the partner in a KG who is personally liable without limit, and manages its business. A GmbH or UG can also be the general partner, as in the GmbH & Co. KG.Limited partner (Kommanditist)The limited partner is the partner with limited liability in a KG; they are only liable to creditors up to their liability amount entered in the commercial register. Once they have paid their contribution, their liability is excluded.

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