Managing Director Liability

Managing director liability (Geschäftsführerhaftung) refers to the personal liability of a GmbH's managing director with their private assets. The core provision is § 43 GmbHG: the managing director must apply the care of a prudent businessperson and is liable to the company in damages if they breach this duty.

Beyond this internal liability, there is a multitude of external liability rules: liability for delayed filing of insolvency under § 15a InsO, liability for non-payment of social security contributions under § 266a of the Criminal Code (StGB), tax liability under §§ 34, 69 AO, and tort liability towards business partners. On top of these come sector-specific duties, for instance under anti-money-laundering rules, the supply chain due diligence act, or data protection law.

Crisis situations are the key risk area: in cases of illiquidity or over-indebtedness, short insolvency filing deadlines apply, and missing them can quickly trigger personal liability and criminal prosecution. Documentation of business decisions in line with the German business judgment rule, a functioning compliance system and a D&O insurance policy with sufficient cover therefore form the basic toolkit of every managing director.