Managing director's service agreement (Geschäftsführervertrag)
Also: Geschäftsführervertrag, Anstellungsvertrag des Geschäftsführers, director's employment contract
In short
The managing director's service agreement governs the managing director's employment, for example remuneration, duties, holidays, liability and termination. It is separate from the appointment, which is what makes them a body of the company.
Managing director's service agreement (Geschäftsführervertrag) explained
Appointment and employment are two different things. Appointment by the shareholders makes someone managing director and can be revoked at any time, without prejudice to compensation claims under existing contracts (Sec. 38 (1) GmbHG). If the managing director is dismissed, their contract therefore does not end automatically unless it provides otherwise. The salary of a shareholder-managing director must be reasonable; otherwise, the tax office treats the excessive part as a hidden profit distribution. If the managing director concludes the contract with themselves, they need an exemption from Sec. 181 BGB. When forming a GmbH or UG through Recht 24/7, the managing director's service agreement is included in the fixed price.
