Directors in Germany

Directors in Germany

Updated on Monday 14th September 2015

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Directors-in-GermanyLegislation regarding company directors in Germany

The legal framework regulating company director’s duties and responsibilities in Germany is comprehensive. Both the German Civil Code and the Commercial Law contain important provisions about the director’s role, duties and responsibilities within a company. Other important documents regarding the duties of directors are stipulated in the company’s articles of association. Beside these universal regulations, each type of company will also depend on specific regulations among which:

  • - limited liability companies will respect the Limited Liability Company Act,
  • - stock corporations will respect the German Stock Corporation Act,
  • - companies in the financial and insurance companies will respect the German Stock Exchange Act, the Securities Act, the Securities Acquisition and Takeover Act and the Corporate Governance Code.

Company management in Germany

The company management structure in Germany differs from other European companies management structures. According to the German Commercial Code, companies have a management board and a supervisory board. The management board is comprised of directors handling the day-to-day activities in the company. A German company may have at least one director and up to an unlimited number of directors. For companies with a registered capital of over 3 million euros the minimum number of directors is two.

The general duties of directors in Germany

The director of a German company is responsible for the company’s management and will also represent the company in relation to third parties. Among the most important duties of the German director are:

  • - to manage the company in a proper manner,
  • - the make sure all company’s purposes are fulfilled,
  • - not to disclose confidential or sensitive information about the company,
  • - not to take advantage of their position.

The German company director must also keep the shareholders informed about the company’s matters and to convene the shareholders’ annual meeting. Company directors in Germany are protected by the business judgment rule which is why they must act with care and diligence when exercising their duties.

For complete information about appointing and removing company directors you may contact our law firm in Germany.