Change of Managing Directors: Appointment, Removal and Resignation

A change in the management is one of the most frequent events in the life of a GmbH – and it regularly raises the same questions: Who actually needs to see the notary? From what moment is the new managing director in office? And how quickly can it be done? On this page you will find the answers for the typical cases – from a new appointment and a removal to a resignation. The same applies mutatis mutandis to the UG (haftungsbeschränkt).

The Procedure at a Glance

The change of managing directors in five steps

1. Enquiry and Data You send us the details of the company and the persons concerned – most conveniently via our data sheet on changes of managing directors.
2. Drafts We prepare the commercial register filing and, on request, the shareholders' resolution as well as – in the case of a resignation – the letter of resignation. You receive the drafts in advance by e-mail for review.
3. Certification Appointment A short appointment at our office: the filing managing directors sign the register filing and the notary certifies their signatures. A newly appointed managing director also makes the statutory declaration required by law. Alternatively, the certification can take place in the online procedure via video communication.
4. Electronic Filing We file the application together with its attachments (in particular the shareholders' resolution or the letter of resignation) electronically with the register court.
5. Registration The register court usually registers the change within a few working days. We will notify you as soon as the registration has been completed.

Appointment, Removal, Resignation – the Three Scenarios

The term “change of managing directors” covers three different scenarios, which occur individually or in combination:

New Appointment

The shareholders appoint the new managing director by resolution and at the same time determine his or her power of representation. Any natural person with full legal capacity can be a managing director – German citizenship or a place of residence in Germany are not required. The new managing director must take part in the register filing, because it contains his or her personal declaration that no grounds for disqualification exist. The personal requirements a managing director of a GmbH must meet are set out in section 6 of the German Limited Liability Companies Act (GmbHG) – an English translation is available here.

Removal

The removal is likewise effected by shareholders' resolution and – unless the articles of association provide otherwise – is possible at any time and without cause. Important: the removal only concerns the corporate office. Any existing service agreement of the managing director remains unaffected and must be terminated separately – that is not a notarial matter but a question of employment and service contract law, on which your lawyer can advise where necessary.

Resignation

A managing director can also resign from office – by unilateral declaration to the company or the shareholders, in principle at any time and without stating reasons. For the commercial register filing, the letter of resignation together with proof of its receipt is required as evidence; we will gladly provide you with suitable wording.

Who Needs to Be Involved – and Who Does Not?

The filing with the commercial register must be signed by the managing directors in the number required to represent the company – that is, by as many managing directors as are needed to represent the company, in their new composition after the change. A newly appointed managing director is always involved, because he or she must make the statutory declaration in person.

A common misconception: the removed or departing managing director does not need to take part in the filing and does not need to come to the notary. Nor do the shareholders themselves have to appear – they merely pass the resolution, which is attached to the filing.

The New Managing Director's Statutory Declaration

For every new appointment, the law requires a personal declaration by the new managing director to the register court that no grounds for disqualification exist. Disqualified from office is anyone who does not meet the requirements of section 6 GmbHG.

The notary instructs the new managing director at the appointment about the unlimited duty of disclosure towards the register court; this instruction can also be given in writing, which makes the process easier in particular for parties abroad. A false declaration is a criminal offence – in case of doubt, we clarify in advance whether a ground for disqualification exists; please contact us beforehand.

Power of Representation and Section 181 of the German Civil Code

With the appointment, the shareholders determine how the new managing director represents the company: alone or jointly with another managing director or an authorised officer (Prokurist). In addition, he or she can be released from the restrictions of section 181 of the German Civil Code (BGB) – the director may then enter into transactions between the company and himself or herself, or act as representative of a third party, which is regularly advisable for sole shareholder-directors, for example.

Important: the specific representation arrangement must be covered by the articles of association. If, for example, the articles do not provide for sole representation or for a release from section 181 BGB, they must first be amended – which requires a notarised resolution amending the articles. We check this on the basis of your articles and will contact you if action is needed. In particular, the statutory model protocol used as articles of association does not permit newly appointed managing directors to be granted general sole power of representation or a release from section 181 BGB; in that case, the aforementioned amendment of the articles would first be required.

Parties Abroad and the Online Procedure

Neither the new nor the other managing directors need to travel to Germany for the change. There are three routes:

• Online procedure: The certification of signatures for commercial register filings can take place via video communication through the portal of the Federal Chamber of Notaries – see our page on the online procedure. A technically suitable (electronically readable) identity document is required.
• Certification abroad: The signature can also be certified by a foreign notary or a German diplomatic mission; depending on the country, an apostille or legalisation is then required. We provide the text of the filing.
• Appointment at our office: Dr. Baer certifies and gives the required instruction in German, English and Dutch; for other languages an interpreter can be called in – see our page on international matters.

Foreign Companies as Shareholders

If shareholders of the GmbH are foreign companies, then with regard to the shareholders' resolution the due existence of those shareholders and the authority to represent them of the persons signing the resolution must be evidenced. An up-to-date extract from the foreign commercial register is customary; for jurisdictions without a meaningful register (e.g. the USA or the United Kingdom), a Certificate of Incumbency or Certificate of Good Standing or a certificate issued by a foreign notary may be used. These documents regularly require an apostille or legalisation and, where applicable, a certified translation. Please contact us early on – we will gladly clarify in advance which evidence is required in your specific case, as obtaining it abroad can take some time.

Frequently Asked Questions about Changes of Managing Directors