Every UG needs at least one managing director to represent the company both internally and externally. As the central management person, the managing director has a variety of tasks and duties that are essential for the legally compliant operation of the UG. In this article, you will find out what requirements are placed on the managing director, what legal obligations exist and what you should pay particular attention to as a founder.
Here are the 5 most important points at a glance for managing a UG (Unternehmergesellschaft):
Legal Requirements
The managing director must be of legal age, legally competent, and must not have committed any criminal offenses such as insolvency crimes, fraud, or embezzlement. Additionally, any adult, regardless of nationality, can become the managing director of a UG.
Responsibilities and Duties
The managing director’s tasks include the operational management of the UG, legal representation, bookkeeping, tax declarations, and compliance with statutory obligations. They are also responsible for properly conducting shareholder meetings.
Liability of the Managing Director
Although the UG has limited liability, the managing director is personally liable in cases of gross negligence, intentional breaches of duty, or failure to comply with insolvency filing obligations.
Shareholder Resolutions
Key decisions, such as profit distribution or capital increases, are made through shareholder resolutions, which the managing director is responsible for implementing.
Remuneration and Employment Contract
Managing directors typically receive remuneration, which is subject to taxation. For shareholder-managing directors, the taxation is classified as business income, while for external managing directors, it is treated as income from employment.
The managing director of a UG can either be a shareholder who simultaneously takes over the management (so-called ‘managing partner’), or he can be an employed managing director (external managing director).
Both forms of management are subject to the same legal duties and responsibilities. The main difference is that the managing partner owns shares in the company and is entitled to vote at the shareholders' meeting, whereas the external managing director does not hold any shares and therefore has no right of co-determination in shareholder decisions.
To become the managing director of a UG (Unternehmergesellschaft), you must meet certain legal requirements. Here are the key points summarized for you:
Minimum Requirements
You must be of legal age and legally competent. This means that any natural person who is at least 18 years old and possesses the necessary legal capacity can assume the role of managing director.
Disqualifications Due to Criminal Records
There are legal barriers that prevent certain individuals from becoming managing directors, such as:
Important Qualifications
While no specific professional qualifications are required, a solid understanding of economic, legal, and entrepreneurial matters is highly advantageous. In particular, expertise in accounting, tax law, and employee management is essential to handle daily challenges effectively and lead the UG to success.
The shareholders’ meeting is responsible for appointing the managing director. If a managing director is appointed or terminates his/her office, this must be entered in the commercial register by a notary.
The exact rights and duties of the management are regulated in a management contract. Agreements on remuneration, notice periods and non-competition clauses are made there. It is possible for a managing director to have a secondary occupation, which must be recorded accordingly in the managing director contract.
As the management is bound by the shareholders’ instructions, it must implement all of the shareholders’ requirements. If she harms the company and disregards her duties, she can be held liable. If there are several managing directors, all of them are obliged to monitor compliance with the obligations. This is because all managing directors are generally jointly liable for errors made by the other managing directors.
The UG is a limited liability company, which is why the shareholders are generally not liable with their private assets. In contrast, the managing director may be liable with his or her private assets, whereby a distinction must be made between liability towards the company and towards third parties.
In particular, the managing director may be liable to third parties:
As the managing director of a UG, you are not only responsible for the day-to-day running of the business, but also for the legal and financial security of the company. You represent the company externally and must protect the interests of the shareholders. Your tasks include bookkeeping, convening shareholders' meetings and carefully implementing high-risk decisions. With sound knowledge in the relevant areas and a clear management contract, you can successfully manage the UG and lead it to long-term success.
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