Executive Summary: German law allows managing director changes at any time through shareholder resolution, but specific legal steps and commercial register updates are mandatory to ensure legal certainty and avoid third-party complications. Changes become effective immediately upon resolution, but proper documentation and registry filing are essential for risk management.
Legal Framework: What German Law Says About Managing Director Changes
Core Requirements Under GmbHG
German managing director appointments and dismissals are governed primarily by §38 and §46 GmbHG. Under §46 No. 5 GmbHG, shareholders retain the authority to appoint and dismiss managing directors at any time through resolution, regardless of cause, unless your articles of association specify additional requirements.
Key legal principle: Dismissal can occur "at any time without stating special reasons" unless articles of association provide otherwise. This gives shareholders maximum flexibility in management changes, but proper procedure remains critical for legal certainty.
The legal framework distinguishes between two separate relationships:
- Corporate appointment (Geschäftsführer-Bestellung) under company law
- Service agreement (Anstellungsvertrag) under employment law
Both must be addressed during management changes, as terminating the corporate office does not automatically end employment obligations or notice periods.
When Changes Become Legally Effective
Managing director changes become effective immediately upon shareholder resolution, regardless of commercial register entry. This is a crucial point for international counsel managing German subsidiaries—you don't need to wait for registry confirmation to proceed with banking updates or third-party notifications.
However, delayed registry updates create third-party protection risks. External parties can rely on outdated commercial register information, potentially creating:
- Continued liability for dismissed directors
- Representation complications for new appointees
- Banking and contract execution challenges
Risk mitigation strategy: File commercial register updates within 2 weeks of the resolution to minimize exposure windows.
The Dismissal Process: 8 Essential Steps
Step 1: Review Articles of Association and Service Agreement
Before initiating dismissal proceedings, conduct a comprehensive review of governing documents:
Articles of Association checklist:
- Voting thresholds (simple majority vs. qualified majority requirements)
- Special dismissal procedures or notice requirements
- Restrictions on dismissal timing or cause requirements
Service Agreement analysis:
- Employment notice periods (typically 3-6 months for senior management)
- Severance obligations and calculation methods
- Non-compete clauses and garden leave provisions
- Distinction between corporate dismissal and employment termination
Critical insight: Corporate dismissal under company law and employment termination are separate legal acts requiring independent handling.
Step 2: Draft Shareholder Resolution
Your dismissal resolution must include specific mandatory elements:
Required content elements:
- Clear identification of the dismissed director (full name, birth date, residence)
- Effective date of dismissal (immediate vs. future date)
- Revocation of commercial register authority and bank signatures
- Instructions for handover procedures and company property return
Voting procedures: German law permits both formal shareholders' meetings and written resolutions (schriftliche Beschlussfassung), providing flexibility for urgent management changes.
Step 3: Convene Shareholders' Meeting or Circulate Written Resolution
Meeting requirements:
- Minimum notice period: Check your articles of association for specific requirements
- Quorum thresholds must be met for valid resolutions
- Proper documentation of voting results and attendance
Written resolution advantages:
- Faster execution for time-sensitive changes
- Reduced coordination complexity for international shareholders
- Lower administrative costs compared to formal meetings
Step 4: Execute Resolution and Notify Managing Director
Formal notification requirements:
- Written delivery of dismissal resolution to the affected director
- Specification of effective date and handover expectations
- Clear separation between corporate dismissal and employment matters
Delivery methods: Use registered mail or courier service with delivery confirmation to create proper documentation trail for potential disputes.
Steps 5-8: Commercial Register and Legal Formalities
Step 5: Prepare Commercial Register Application Document preparation requires specific information:
- Certified copy of shareholder resolution
- Dismissal notification with director acknowledgment (if available)
- Updated list of remaining managing directors
Step 6: Notarization Process Application must be notarially certified and submitted electronically by the acting notary. This cannot be handled directly by the company or its counsel.
Step 7: Electronic Submission Notaries submit applications through the electronic court and notary mailbox (EGVP) system, ensuring proper technical compliance with registry requirements.
Step 8: Monitor Processing and Follow-up Registry processing typically ranges from several days to several weeks depending on court workload and case complexity. Some courts process applications rapidly when workload permits, while others may require longer processing periods.
The Appointment Process: 10-Step Checklist
Pre-Appointment Requirements
Eligibility criteria verification:
- Must be a natural person with unrestricted legal capacity
- No disqualifying criminal convictions (five-year restriction period for certain business-related offences)
- German citizenship and residency are not required under current law
Documentation requirements:
- Criminal background declaration (Führungszeugnis zur Vorlage bei einer Behörde)
- Identity verification documents
- Residence confirmation and contact details
Appointment Resolution Process
Shareholder meeting requirements:
- Proper notice and quorum compliance
- Detailed discussion of candidate qualifications
- Clear documentation of voting results
Resolution content specifications:
- Full name, birth date, and residence address of appointee
- Scope of representation authority (individual vs. joint representation)
- Effective date of appointment
- Banking and signature authority grants
Written resolution alternative: Particularly useful for international shareholders, allowing appointment execution without physical meeting coordination.
Notarization and Registry Steps
Document preparation checklist:
- Appointment resolution with complete director information
- Acceptance declaration from the new managing director
- Updated company management overview
Signature requirements:
- New director must sign acceptance declaration personally
- Foreign notarization acceptable with proper authentication
- Electronic signature options limited—physical presence typically required
Electronic submission process:
- Notary handles all electronic filing requirements
- Court communications managed through EGVP system
- Client receives confirmation of successful submission
Commercial Register Updates: Timeline and Requirements
What Must Be Filed
Mandatory filing information:
- Complete director personal details (name, birth date, full address)
- Representation authority scope and limitations
- Effective dates for all changes
- Updated signature specimen cards for banking
Documentation package:
- Notarized shareholder resolution
- Director acceptance declarations
- Criminal background confirmations
- Address verification documents
Processing Timeline and Costs
Standard processing expectations:
- Processing typically ranges from several days to several weeks depending on court workload and case complexity
- Expedited processing available in some jurisdictions for urgent business needs
- Complex cases with multiple changes may require additional review time
Cost structure breakdown:
- €200 base registration fee for basic GmbH registration (fees may vary depending on case complexity and jurisdiction)
- Additional €40-€50 for complex entries or multiple simultaneous changes
- Notary fees typically €150-€300 depending on scope and complexity
- Total project cost range: €400-€600 including professional services
Common Delays and How to Avoid Them
Document deficiency issues:
- Incomplete director personal information
- Missing criminal background declarations
- Insufficient address verification documentation
Registry-specific complications:
- Court workload variations between jurisdictions
- Seasonal processing delays (summer/winter court schedules)
- Technical system maintenance affecting electronic submissions
Avoidance strategies:
- Submit complete document packages from initial filing
- Verify court-specific requirements before preparation
- Build adequate buffer time into critical path planning
Practical Considerations and Risk Management
Banking and Third-Party Updates
Banking signature authority changes: Update bank signature cards immediately after shareholder resolution execution. German banks typically require:
- Certified copy of commercial register extract (after filing)
- Updated signature specimen cards
- Board resolution authorizing banking changes
- Identity verification for new signatories
Customer and vendor notifications: Develop systematic notification process for key relationships:
- Major customer contracts requiring director signature
- Supplier agreements with personal guarantees
- Landlords and utility providers
- Insurance carriers and professional service providers
Tax and Compliance Implications
Payroll and social security changes:
- End social security registration for dismissed directors
- Process final payroll calculations including accrued benefits
- Handle pension scheme transfers and continuation options
- Update tax registration information with local authorities
Ongoing compliance obligations:
- VAT registration updates if director was authorized signatory
- Trade license modifications where required
- Professional liability insurance policy updates
- Data protection officer notifications (if director held this role)
Emergency Management Scenarios
Temporary management arrangements: When management changes create representation gaps, shareholders can:
- Appoint interim directors with limited authority
- Establish joint management requirements temporarily
- Delegate specific signature authority to remaining directors
Court-appointed management: In extreme cases where no directors remain or appointment disputes arise, commercial courts can appoint temporary management under applicable German law provisions for interim managing directors.
Expert Tips and Best Practices
Planning Your Management Change
Succession planning strategies:
- Maintain updated candidate pipeline for critical management positions
- Document institutional knowledge and client relationships
- Establish clear handover protocols and timelines
- Consider overlap periods for complex transitions
Timing considerations for optimal execution:
- Avoid year-end and audit season conflicts
- Consider banking holidays and notary availability
- Plan around critical business deadlines and board meetings
- Factor in vacation schedules for key stakeholders
Working with Advisors
Notary coordination best practices:
- Book notary appointments 2-3 weeks in advance
- Prepare all documentation before scheduling
- Confirm electronic submission capabilities
- Verify cost estimates and payment procedures
Legal and tax counsel integration:
- Coordinate employment law and company law aspects
- Align tax planning with corporate structure changes
- Address pension and benefit continuation issues
- Plan for potential dispute resolution needs
FAQ Section
Q: Can we dismiss a managing director without cause? A: Yes, German law allows dismissal at any time without stating special reasons unless your articles of association require good cause. However, employment contract provisions regarding notice periods and severance may still apply separately under labor law.
Q: How long does the commercial register update take? A: Processing typically ranges from several days to several weeks depending on court workload and case complexity. Some courts process straightforward applications rapidly when resources permit, while complex filings or incomplete documentation can extend processing time significantly.
Q: Do appointment changes require a physical shareholders' meeting? A: No, written shareholder resolutions are legally permitted and often preferred for efficiency. However, the appointment resolution must still be notarized for commercial register filing, requiring physical presence for signature authentication.
Q: What happens if we don't update the commercial register immediately? A: The management change remains legally effective between shareholders and the company, but third parties can rely on outdated register information. This creates potential liability risks for dismissed directors and representation complications for new appointees.
Q: Can foreign residents serve as managing directors? A: Yes, German citizenship and residency are not legal requirements for managing directors. However, practical considerations include the ability to travel to Germany for notary appointments and banking procedures.
Q: Are there restrictions on who can serve as managing director? A: Managing directors must be natural persons with unrestricted legal capacity. Criminal convictions for certain business-related offenses create a five-year disqualification period. Bankruptcy proceedings may also temporarily disqualify candidates.
Document Templates and Process Tools
Shareholder Resolution Templates
Standard dismissal resolution format: "The shareholders of [Company Name] hereby resolve to dismiss [Director Name], born [Date], residing at [Address], from the position of managing director effective [Date]. All representation authority and banking signatures are hereby revoked."
Appointment resolution template: "The shareholders hereby appoint [Director Name], born [Date], residing at [Address], as managing director effective [Date] with [individual/joint] representation authority for all company matters."
Commercial Register Filing Checklist
Pre-filing verification:
- Notarized shareholder resolution with all required signatures
- Director personal information complete and accurate
- Criminal background declaration obtained and current
- Address verification documentation attached
- Notary appointment scheduled with adequate lead time
Post-filing monitoring:
- Court filing confirmation received
- Processing timeline established and tracked
- Banking updates scheduled for registry completion
- Third-party notifications prepared for distribution
About Vectocon: As an integrated legal and tax boutique, Vectocon provides comprehensive support for German subsidiary operations, combining corporate law expertise with tax compliance under one roof. Our pragmatic, digital-first approach ensures efficient execution of management changes while maintaining full legal certainty for international clients.
Sources & Facts Used
[S1] CTC Legal – Dismissal of the GmbH Managing Director: https://www.ctc.legal/en/news/dismissal-of-the-gmbh-managing-director/
[S2] Watson Farley & Williams – How to Run a GmbH in Germany: https://www.wfw.com/articles/how-to-run-a-gmbh-in-germany/
[S3] Kanzlei Herfurtner – Managing Director: https://kanzlei-herfurtner.com/managing-director/
[S4] Cross Channel Lawyers – How to Read a German Commercial Register Extract: https://www.crosschannellawyers.co.uk/how-to-read-a-german-commercial-register-extract/
[S5] Clevver.io – Getting Your Company Registration Number in Germany: https://www.clevver.io/getting-your-company-registration-number-in-germany/