GmbH Dictionary Definitions Part IV

Liability in the event of bankruptcy

Particular caution is also required with regard to liability in the event of bankruptcy . Even then, the shareholders only have to pay for the company’s debts with their invested capital. Often, however , the bankruptcy application is filed too late. Then things get tight for the managing director, as he is liable to the company for all damage caused as a result and the insolvency administrator these demands also enforced. For example, if the managing director still pays wages and salaries even though the company must already be viewed as insolvent, he is liable for the amount paid out, which is lost to the bankruptcy estate. After insolvency has occurred, only those open invoice items whose payment is considered to be unavoidable may be settled. These include, for example, electricity and gas if the utility threatens to shut it down, as well as the invoices from important suppliers if there is otherwise the risk that operations will come to a standstill due to a lack of materials. In the event of insolvency, however, wages and salaries are initially paid by the employment agency.

When is a GmbH insolvent?

According to HEALTHKNOWING, if a GmbH is over-indebted or insolvent, it is one of the duties of a managing director to immediately file for bankruptcy .

  • Definition – Insolvency : The GmbH is to be regarded as insolvent if current payment obligations can no longer be met. You can remember the following rule. If the due liabilities are more than 10 percent higher than the available liquid funds, then the GmbH is considered insolvent.
  • Definition – over-indebtedness: If the liabilities can no longer be covered with the existing assets, the GmbH is over-indebted.

In both cases, an application for insolvency must be filed immediately and without delay.

When is a managing director liable?

With the assumption of the duties of a managing director a whole series of duties begins which he has to fulfill. A breach of these obligations can result in some liability grounds for the managing director. It cannot only be held liable by the company or its shareholders. He is also liable to third parties if he violates these obligations. Therefore, as a possible managing director, you should know exactly what reasons there are for which you can be held liable.

Liability reason description
Internal liability The duty of the proper management of the GmbH is expected from the managing director. This is regulated in Section 43 (1) GmbHG . It doesn’t matter whether you are an experienced or inexperienced manager. One of the main tasks of him with this liability reason is that he safeguards the financial interests of the GmbH and pursues the purpose of the company.
External liability This is what is known as tortious liability . External liability always comes into consideration if the managing director causes damage to a third party through his actions . If his actions violate legal interests, the managing director must be personally liable .
Liability for business risks One of the tasks and duties of a managing director is that he always has everything in view. This applies to employees and also to accounting. If the GmbH gets into difficulties due to an economic failure, this does not mean that he has to be liable for it. Liability only arises if he endangers the GmbH through his actions , for example through unmanageable risks that he has taken.
Liability for personal gain If the GmbH suffers damage through personal enrichment of the managing director, he must be liable for it. In addition, he has to compensate society for the damage that has resulted from it.
Liability for division of responsibilities It is not an isolated case that a GmbH is managed by several managing directors. In this case, they often divide their tasks by managing specific departments. Everyone is responsible for a specific area. But this division of responsibilities does not release a managing director from his joint and several liability .
Liability for failure to notify changes Every managing director is obliged to submit an updated list to the commercial register in the event of changes in the company . This can be a change in the number of shareholders , for example . This is regulated in Section 40 (1) GmbHG .
Liability to creditors of the company The managing director is liable to the owners of the company if he appears under the false name of the GmbH . This arises from the principles of legal appearance.
Liability in the event of a violation of the non-compete clause and confidentiality obligations According to the law and the employment contract, the managing director has a duty of loyalty . He is not allowed to compete with the company he represents. There is also liability if he passes on business or trade secrets to third parties .
Liability for compliance with tax obligations A managing director has the task of contributing to the fulfillment of the tax obligations of the GmbH. This is stipulated in ยง 34 AO . If he makes a culpable mistake here, he is threatened with a liability claim .
Liability in the event of a violation of the rules on capital maintenance If you think the CEO against the transfer of the shareholders on the raising of capital and capital maintenance , he is personally liable for it. This is especially true if he disregards the protection of creditors.

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