Dismissal of the Gmbh Managing Director in Germany (2026): Step-by-step Under §38 Gmbhg

At a glance: The dismissal of the GmbH managing director is governed by Section 38 of the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG), which grants shareholders the power to revoke the appointment at any time unless the articles of association provide otherwise. Crucially, corporate removal strips the managing director of representative authority but does not, by itself, terminate any underlying employment or service contract, creating a dual-track process that demands careful coordination between corporate governance steps and employment-law compliance.

This guide walks in-house counsel and shareholders through every stage: from reviewing the company’s articles, to drafting and passing the shareholder resolution, to completing the notary deed for a managing director change and filing with Germany’s commercial register (Handelsregister). It also addresses the severance and litigation risks that make this area a frequent source of disputes.

Quick Answer: Can a GmbH Dismiss Its Managing Director?

Yes. Under Section 38 GmbHG, the shareholders of a GmbH may revoke the appointment of a managing director (Geschäftsführer) at any time by passing a shareholders’ resolution. No specific grounds are required under the statutory default rule, the revocation of appointment in a GmbH is, in principle, a free right of the shareholders’ meeting.

However, the company’s articles of association (Gesellschaftsvertrag) may restrict this right, for example by requiring “important cause” (wichtiger Grund) or imposing a supermajority threshold. Furthermore, removing a managing director from their corporate role does not automatically end their employment contract. Managing director severance in Germany is therefore a separate negotiation that must run in parallel with the corporate governance steps. In-house counsel should always treat the dismissal as a two-stage process: corporate revocation first, employment consequences second.

Legal Basis: Section 38 GmbHG and the Dismissal of the GmbH Managing Director

The statutory foundation for removing a GmbH managing director is Section 38 GmbHG. Paragraph 1 provides, in paraphrase, that the appointment of managing directors may be revoked at any time. This default rule means that shareholders are not required to state grounds, observe a notice period, or obtain court approval to effect the revocation.

Section 38(2) GmbHG qualifies this rule: the articles of association may restrict revocation to cases where important cause exists. Where the articles include such a restriction, shareholders who revoke without satisfying that threshold risk having the resolution challenged in court. Additionally, Section 46 No. 5 GmbHG confirms that the revocation falls within the shareholders’ meeting’s competence, reinforcing that neither the managing director themselves nor any supervisory body can unilaterally effect or block the dismissal absent an express provision in the articles.

Interaction with the Articles of Association

The articles of association may deviate from the statutory default in several ways. Common modifications include requiring a qualified majority (e.g., 75 % of votes cast), limiting revocation to enumerated grounds, or stipulating that only certain shareholder groups may propose the resolution. Before convening any meeting, counsel must review the current articles, including any shareholder agreement (Gesellschaftervereinbarung) that sits alongside the formal constitutional documents. Where deadlock provisions or shareholder remedies exist, they may affect the procedural pathway for removal.

When Revocation Requires a Reason

If the articles restrict dismissal to “important cause,” the threshold typically mirrors the standard applied under general civil law: the managing director must have engaged in conduct that makes continued service unreasonable for the company. Examples include serious breach of duty, criminal offences connected to the role, or a sustained inability to perform. Where minority shareholder protections apply, for instance, when the managing director is also a minority shareholder, the evidentiary bar may be higher in practice, and courts will scrutinise whether the stated grounds genuinely justify the revocation.

Who Decides? Shareholder Thresholds, Quorum and Minute Formalities

The shareholders’ meeting (Gesellschafterversammlung) is the competent organ for removing a managing director. Under the statutory default, a simple majority of votes cast at a properly convened meeting is sufficient. The articles may impose a higher threshold, a two-thirds or three-quarters majority is common in joint-venture GmbHs.

A quorum requirement may also apply. Where the articles are silent, Section 47 GmbHG governs voting, and no statutory quorum is prescribed; however, many articles do require, for example, shareholders representing at least 50 % of the share capital to be present or represented. Proxy voting is generally permitted if the articles allow it.

Alternatively, Section 48(2) GmbHG permits shareholders to pass resolutions in writing (Umlaufverfahren) without holding a physical meeting, provided all shareholders consent to this procedure. This is a practical option in single-shareholder GmbHs or where all shareholders agree to expedited action.

Minutes of the resolution must record the vote count, the identities of shareholders voting for and against, and the precise wording of the resolution. While the GmbHG does not mandate notarisation of the minutes themselves, the commercial register will require notarially certified signatures or a notarial deed when the change is filed. Accurate, contemporaneous minutes are also critical evidence if the managing director later challenges the validity of the resolution.

Step-by-Step Process for Removing a GmbH Managing Director

Step 1, Pre-Meeting Checks

Before any meeting is convened, counsel should assemble and review the following documents:

• Articles of association, confirm majority and quorum requirements, any “important cause” restriction, and notice-period provisions for convening the meeting.
• Managing director’s service or employment contract, identify notice periods, severance triggers, non-compete clauses, and any garden-leave provisions.
• Current commercial register extract, verify the managing director’s registered authority (sole or joint representation, any branch-office registrations).
• Powers of attorney and bank signatory records, list all authorities that will need to be revoked or updated after dismissal.
• Shareholder agreement (if any), check for tag-along, drag-along, or consent rights that may affect the process.

Step 2, Calling and Passing the Shareholder Resolution

Convene the shareholders’ meeting in accordance with the notice requirements set out in the articles (typically at least one week’s written notice, unless waived by all shareholders). The agenda must clearly state that the revocation of the managing director’s appointment will be voted upon.

At the meeting, the chairperson calls the vote, records the result, and ensures the minutes capture all required detail. The following sample wording can serve as a template for the shareholder resolution managing director removal:

Sample shareholder resolution (template):

• Resolution: “The shareholders’ meeting of [Company Name] GmbH hereby resolves to revoke the appointment of [Full Name of Managing Director] as managing director (Geschäftsführer) of the company with immediate effect [or: effective as of [date]].”
• Vote: “The resolution was adopted with [X] votes in favour and [Y] votes against, representing [Z] % of the share capital.”
• Ancillary instructions: “The management [or: remaining managing directors] is instructed to file the change with the competent commercial register without delay and to revoke all powers of attorney and signatory authorities held by the dismissed managing director.”

Where the managing director being dismissed is also a shareholder, they are generally excluded from voting on their own removal under Section 47(4) GmbHG if the resolution concerns revocation for cause.

Step 3, Notary Formalities

Although the resolution to revoke a managing director does not itself require notarial form under the GmbHG, the commercial register filing will ordinarily require notarial certification. The notary’s role includes:

• Certifying signatures on the application to the register.
• Preparing the notarial deed for the managing director change if the articles require a notarised resolution.
• Verifying identity, the signatory (usually the new or remaining managing director) must present a valid passport or identity card.

Bring to the notary appointment: the signed minutes, the current commercial register extract, the articles of association, and identification documents for all signatories.

Step 4, Commercial Register Filing

The change must be filed with the competent local court (Amtsgericht) maintaining the Handelsregister. The commercial register filing in Germany for a managing director change typically requires:

• Notarially certified application signed by the remaining or newly appointed managing director(s).
• Certified copy of the shareholders’ resolution (with notarial certification of signatures).
• Updated list of managing directors in the prescribed format.

Processing times vary by local court but generally range from one to three weeks. Court fees for the register entry are modest, typically in the range of EUR 30–70 for the registration itself, with additional notary fees calculated under the Gerichts- und Notarkostengesetz (GNotKG) based on the company’s share capital.

Step 5, Practical Steps after Register Entry

Once the Handelsregister reflects the change, several operational updates are required:

• Bank accounts: Revoke the former managing director’s signatory authority and update bank records.
• Business partners and customers: Notify key contractual counterparties, especially where the former managing director’s name appears on framework agreements.
• Company letterhead and website: German law requires that commercial correspondence and the company’s website disclose the names of all current managing directors (Section 35a GmbHG).
• IT and access: Terminate email accounts, VPN access, and building entry credentials.
• Insurance: Notify D&O insurers of the management change.

Notary and Register Practice: Common Friction Points

Practitioners regularly encounter procedural delays during the filing process. The table below summarises key actions, whether notary involvement is required, and typical documentation and timeframes.

The most common friction point is a mismatch between the resolution’s wording and the register court’s expectations. Courts may reject filings if the resolution does not clearly identify the managing director being removed, if dates are ambiguous, or if required attachments are missing. A second common issue arises when the managing director is named in the articles of association itself, in that case, the articles must be formally amended by notarial deed under Section 53 GmbHG before the register will process the deletion.

Employment and Severance Pitfalls: When Dismissal Does Not End an Employment Contract

This is the area where the dismissal of the GmbH managing director most frequently leads to disputes. German law draws a strict distinction between the corporate relationship (appointment and revocation under the GmbHG) and the contractual relationship (the service or employment contract between the managing director and the company). Revoking the appointment extinguishes the managing director’s authority to represent the company, but it does not, by itself, terminate their contract or relieve the company of its obligation to pay remuneration.

Where the managing director serves under a service contract (Dienstvertrag), as is typical, the contract must be terminated separately. The company must comply with the contractual notice period, which often ranges from six to twelve months. If termination without notice is sought, the company must establish “important cause” under Section 626 of the German Civil Code (Bürgerliches Gesetzbuch, BGB), a high threshold that requires action within two weeks of the shareholders becoming aware of the grounds.

The practical consequence is that the company frequently faces a period during which the dismissed managing director has no authority to act for the company but remains entitled to full compensation. This creates strong incentives for both sides to negotiate a mutual termination agreement (Aufhebungsvertrag) that addresses:

• Severance payment, typically calculated based on remaining contract term, annual compensation, and the strength of the company’s grounds for termination.
• Garden leave, an immediate release from duties with continued salary, often paired with a non-compete undertaking.
• Post-contractual non-compete, enforceability depends on whether adequate compensation is offered for the restriction period.
• Reference letter and public communication, agreed wording for press releases and LinkedIn updates to manage reputational impact.

Special Cases

MD who is also an employee. In some GmbH structures, particularly smaller companies, the managing director may have been promoted from an employee role without formally terminating their original employment contract. In such cases, German employment law protections, including unfair dismissal rules under the Kündigungsschutzgesetz (KSchG), may apply to the underlying employment relationship. The Federal Labour Court (Bundesarbeitsgericht) has held that labour courts have jurisdiction over claims by managing directors who can demonstrate a surviving employment contract beneath the corporate appointment.

MD with strong contractual protections. Service contracts may include fixed-term provisions, guaranteed bonuses, or change-of-control triggers that significantly increase the cost of dismissal. Counsel should model the worst-case financial exposure before presenting the resolution to shareholders.

Insolvency context. If the GmbH is insolvent or approaching insolvency, the insolvency administrator (Insolvenzverwalter) assumes the power to dismiss and manage the managing director’s contract. Outstanding compensation claims rank as insolvency claims, which substantially reduces the managing director’s practical recovery.

Litigation and Enforcement Risks

The most common claims following a managing director dismissal include:

• Challenge to the resolution, the dismissed managing director (if also a shareholder) or a sympathetic minority shareholder may seek annulment of the resolution on procedural or substantive grounds.
• Breach of service contract, a claim for damages equal to the remaining contract term if the company terminates without valid cause or adequate notice.
• Unfair dismissal (employment law track), if the managing director successfully argues employee status, claims proceed before the labour courts with their own procedural timelines and settlement dynamics.
• D&O liability counterclaims, the company may assert set-off claims for breach of duty discovered during or after the dismissal process.

To mitigate these risks, the following checklist should be completed before the shareholders’ meeting:

• Obtain a legal memorandum from external counsel confirming that grounds for dismissal (if required) are satisfied.
• Ensure minutes are drafted contemporaneously and signed by the chairperson.
• Place a litigation hold on all documents and communications involving the managing director.
• Pre-negotiate the parameters of a settlement authority mandate with the supervisory body or lead shareholder.
• Instruct D&O insurers and confirm coverage for defence costs.

Sample Shareholder Resolution and Filing Checklist

The following model resolution and filing checklist can be adapted for most standard GmbH managing director removals. All drafts should be reviewed by qualified German counsel before execution.

Model resolution (editable template):

• “The shareholders’ meeting of [Company Name] GmbH (registered with the commercial register of [Local Court], under HRB [number]) resolves as follows:”
• “1. The appointment of [Full Name], born [date of birth], as managing director is hereby revoked with effect from [date / immediately].”
• “2. [Full Name of Remaining/New MD] is instructed to file the change with the commercial register without delay.”
• “3. All powers of attorney, signatory authorities, and access rights held by [Full Name] are revoked with immediate effect.”

Filing checklist for the Handelsregister:

• Notarially certified application for registration of change in managing directors.
• Certified copy of the shareholders’ resolution.
• Updated list of managing directors (full names, dates of birth, residential addresses).
• If applicable: notarial deed amending the articles of association (Section 53 GmbHG).
• Valid identification of the signing managing director (passport or Personalausweis).
• Current commercial register extract (for notary’s records).

Quick Comparison: Dismissal Rules by Entity Type

The dismissal of board members in Germany thus varies significantly depending on the entity form. In an AG, the supervisory board, not the shareholders directly, holds the removal power, and the grounds and procedures differ materially from those governing a GmbH. Counsel advising group structures should confirm which entity type employs the individual before initiating any removal process.

Checklist for In-House Counsel

1. Review the articles of association for majority, quorum, and “important cause” requirements.
2. Analyse the managing director’s service contract, calculate worst-case severance exposure.
3. Obtain a current commercial register extract and confirm registered representation rights.
4. Prepare the shareholders’ resolution using the template above; have external counsel review wording.
5. Convene (or arrange written consent for) the shareholders’ meeting with proper notice.
6. Engage a notary, schedule certification of signatures and, if needed, a notarial deed.
7. File the change with the Handelsregister; confirm receipt and track processing.
8. Revoke bank signatory authority, IT access, powers of attorney, and company credit cards.
9. Update company letterhead, website, and email signatures (Section 35a GmbHG compliance).
10. Notify D&O insurers, key business partners, and payroll providers.

Conclusion

The dismissal of the GmbH managing director is one of the most consequential corporate governance actions available to shareholders under German law. While Section 38 GmbHG provides a straightforward statutory mechanism, the practical execution demands careful coordination across corporate, notarial, and employment-law tracks. Failing to manage the employment-contract dimension, or filing incomplete documentation with the Handelsregister, can transform a routine governance step into protracted litigation. Shareholders and in-house counsel navigating this process should engage experienced German corporate lawyers early to review resolutions, prepare the notary and filing pack, and structure a severance framework that protects the company’s interests.

Sources

1. German Limited Liability Companies Act (GmbHG), §38 (Gesetze im Internet)
2. Unternehmensregister (German Company Register)
3. Bundesnotarkammer (German Federal Chamber of Notaries)
4. Bundesministerium der Justiz (Federal Ministry of Justice)
5. Bundesarbeitsgericht (Federal Labour Court)
6. Bundesanzeiger (Federal Gazette)