Geschäftsführer: What are the responsibilities of a GmbH's CEO in Germany?

The Geschäftsführer (CEO) of a GmbH represent the company externally. Without them, a limited liability company would not be able to act at all. But, as the company representative which specific responsibilities – i.e. duties and tasks – do CEOs have exactly?


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Responsibilities & duties of the CEO of a GmbH

The central responsibility of CEOs at GmbH is to implement the corporate purpose of a GmbH or to take all necessary measures to achieve their defined corporate goals. This responsibility is fulfilled by representing the interests of the company, managing the company’s assets, confidentiality with business secrets, and general representation of the company, both legally and beyond. In addition, it’s their duty not to cause damage to the company and to protect it from being damaged by others.


The CEO does not have to be a partner. He or she is appointed by the shareholders’ meeting (Gesellschafterversammlung). The Gesellschafterversammlung also has the power to give instructions and order the removal of the CEO of a GmbH. The powers of the CEO may also be limited in the managing contract (Geschäftsführervertrag). The shareholders’ meeting may reserve the right to authorise the processing of individual transactions.

The employment contract between the CEO and shareholders also specifies certain limitations of his or her personal responsibility and liability. This also applies to his or her powers of legal representation given to him or her in relation to the company. But be careful as although a CEO’s powers of representation may be limited this will generally not be known to the outside world.

All legal transactions that the CEO concludes on behalf of the GmbH – even if he or she disregards their restrictions – are binding for the GmbH. If the CEO acts against regulations agreed in the shareholders’ meeting or the Gesellschaftsvertrag (articles of association), he or she can be held liable for this with private assets.

Researching GmbHs? Make sure you read: CEO salary in a GmbH: How much is a GmbH CEO allowed to earn?

Duty of management

The basic duty of the GmbH CEO is the management of the current business operations of a company, which includes:

  • Fulfilment of the actual business purpose per the articles of association
  • Administrative tasks and organisation
  • Duty to inform the shareholders
  • Execution of shareholder resolutions
  • Representation of the company in external relations
  • Duty of care (Sorgfaltspflicht)

In principle, CEOs are also allowed to delegate tasks to employees, but they are obliged to carefully monitor these tasks. The areas of responsibility can be divided between several CEOs, but the legal duties of the CEOs must be observed by everyone – even by areas of responsibility that have been assigned internally to other CEOs.

Obligation to maintain the Stammkapital (share capital) (§§ 9, 19 ff., 31 GmbHG)

The CEO undertakes to “preserve the share capital of the company”. This means that he or she must call on all shareholders to pay the share capital, monitor all payments and balance sheets and, if necessary, prevent hidden profit distributions.

The CEO is personally liable for all payments that endanger the share capital.


The proper execution of the accounting is also one of the tasks of the CEO. In the first three months of the financial year, it must prepare the annual accounts (Jahresabschluss) and the management report (Lagebericht) for the previous year and is obliged to submit this annual report (Geschäftsbericht) to the shareholders without delay.

Other accounting obligations:

  • The proper and timely preparation of tax returns
  • Payment of taxes due
  • Timely submission of advance sales and income tax returns
  • Retention of income tax and payment to the tax office
  • Reporting all changes and events relevant to the tax office

Obligation to notify the Handelsregister (commercial register) (§ 78 GmbHG)

These tasks may include:

  • Registration of the GmbH with the commercial register, § 7 GmbHG
  • Notification of changes in the persons of the company or the extent of the participation of the CEO by submission of a list of shareholders according to § 40 GmbHG
  • Registration and entry of the amendments to the shareholder agreement, § 54 GmbHG
  • Registration and entry of a resolution to reduce or increase the share capital, § 58 GmbHG

Obligations to employees

The CEO is also responsible for the company’s employees. This includes occupational safety measures, compliance with applicable labour law (e.g. working time laws, youth employment protection law, etc.) and other organisational activities, such as registering employees with health insurance funds or the withholding and payment of social security (Sozialversicherung) contributions.

The CEO is obliged to check the driving licenses of the employees if they are given a company vehicle.

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Fiduciary duties

Fiduciary duties are not expressly regulated by law but are recognised as a general legal principle. The term “duty of trust” (Treupflicht) refers to the obligation to promote the “company purpose”, i.e. the company objective laid down in the articles of association.

This includes the duty of confidentiality of all trade secrets and the general prohibition of competition. For example, the CEO may not conduct any business of his or her own which would be in competition with the company’s business. This applies not only to the areas in which the company is currently active but also to those mentioned in the employment contract between the CEO and shareholders. Misuse of his or her position out of self-interest and to the disadvantage of the company is also a violation of fiduciary duties.

Incidentally, the non-competition clause may continue to apply beyond the CEO’s term of employment. This is stipulated beforehand in the managing contract.


Duty to convene the Gesellschafterversammlung (shareholders’ meeting)

The shareholders’ meeting is convened by the CEO or the management. It should be noted that the meeting must be convened by letter to all shareholders with a notice period of at least one week, provided that no deviation from this statutory provision has been agreed in the shareholder agreement or the articles of association.

A summons must be personally signed by the CEO and contain the following details: Venue, time and agenda.

The convening of the shareholders’ meeting is mandatory by law if one or more of the following points are pending for the GmbH:

  • Collection of full deposit of capital contributions of all shareholders
  • Amendment of the articles of association
  • Requests by one or more shareholders holding at least 10% of the share capital
  • Preparation of the annual accounts
  • Dissolution and liquidation of the GmbH
  • Notification to shareholders if only half of the share capital remains
  • Information for shareholders in particularly risky transactions

All resolutions of the shareholders are generally passed at the shareholders’ meeting. The CEO is obliged to ensure the implementation of these resolutions.

Duty to provide information

Shareholders have the fundamental right to receive unrestricted information on company matters from the CEO and to have access to all documents and books on request. Accordingly, the CEO must ensure this obligation to provide information. Disregarding this duty usually justifies the termination of the employment contract between the CEO and shareholders without notice.

Liability risks of the GmbH CEO

If a CEO does not fulfil his or her duties adequately (or not at all), he or she is personally liable for the damage. This is referred to as internal liability if the damage occurred to the GmbH and its shareholders and external liability if it concerns third parties, such as customers, suppliers or authorities.

The CEO may well be subject to general criminal liability.

The liability can be broken down as follows:

Internal liability

The interior liability of the CEO of the GmbH intervenes:

  • Liability for damages in case of breach of the special relationship of trust, §§ 43 par. 1 and 2 GmbHG, § 826 BGB

Internal liability can be limited to intent and gross negligence.

External liability

The external liability of the CEO of the GmbH applies in the following cases:

  • Liability under property law for tax obligations of the GmbH, §§ 69 ff. AO
  • Liability for the preservation of the share capital, § 43 par.3 GmbHG in connection with 30 GmbHG
  • Insolvency and crisis liability

Liability concerning third parties cannot be limited.

Criminal law liability

The criminal liability of the CEO applies in the following cases:

  • Tax offences such as tax evasion and tax reduction, §§ 370 para. 1 378 para. 1 AO
  • Insolvency offences such as delay in filing insolvency § 15a InsO
  • Bankruptcy, §§ 283, 283a StGB
  • Breach of accounting duty (§ 283b StGB)
  • Fraudulent preference, § 283c StGB
  • Debtors’ preference, § 283d StGB
  • Withholding and embezzlement of pay, § 266a StGB
  • Environmental infringements, §§ 324 ff StGB

Duties of the GmbH CEO during a crisis or insolvency

In the event of a crisis, the CEO of a GmbH also has several duties. For one, he or she should always have an overview of the financial and economic situation of the company to be able to react in good time.

The following cases merit special attention:

  1. The obligation to convene a shareholders’ meeting when half of the share capital has been used up. In the event of imminent insolvency, the CEO is liable in the event of non-compliance.
  2. The obligation to file for insolvency and to secure assets. Insolvency proceedings must be filed no later than three weeks after the occurrence of insolvency or excessive indebtedness. In the event of non-compliance, the CEO may be liable with his or her own private assets. This also applies to the violation of asset protection.

Business transactions despite being insolvent, disbursements to shareholders that endanger or destroy the company’s existence or unpaid social security contributions (excluding employee contributions) are also cases in which the CEO can be held personally liable.

This also applies to tax liabilities caused intentionally or by negligent breach of the accounting and/or submission of the tax return.

Although not all of these cases can be covered by insurance, we still recommend that CEOs talk to an insurance specialist about liability and risks. D&O insurance (directors and officers liability insurance) is also offered on the German market.

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Andreas Munck

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Got questions about setting up a business in Germany?

  • Startup expert
  • 10+ years experience

Hi, I’m Andreas and I’ve been advising businesses in Germany for over a decade. I’d be happy to call you and answer any questions you have in a one-on-one consultation.

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