Requirements for the Dismissal of One of the Two Managing Partners in a Two-person GmbH

09-Aug-2012 | News-Press Release

Cologne, Nordrhein-Westfalen ( prsafe ) August 7, 2012 - An important reason for dismissal and immediate termination of the service contract of managing directors of limited liability companies who are shareholders is given when the relationship between the two directors is profoundly disrupted and a normal cooperation is no longer possible. Prerequisite is that the managing director to be dismissed has significantly contributed to the discord. The fault or even preponderant fault of said director is not required.

GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Dusseldorf, Hamburg, Munich, Stuttgart, Frankfurt elaborate: If the estranged managing partners are at the same time shareholders, the important reason for dismissal and termination of employment contract must also include substantial, objectively ascertainable circumstances that make cooperation impossible. These circumstances could result from the situation and significance of the individual managing partner (such as duration and quality of previous administration, achievements for the company) or from the interests of the company (e.g. business relations, relations with the workforce), which speak for the elimination of one director and for the retention of the other managing director.

In the case of the dismissal of managing directors, especially in a two-person limited liability company, it is imperative that one of the other parties not arbitrarily force the other out of the management position, for example by purposefully causing controversies and disputes in order to remove the other from his post, based on the resulting discord.

In the event of dismissal due to "irreparable rift between the managing directors", the notice period is deemed to be granted if within the last two weeks before the termination another, final event took place that deepened the dispute between the parties or made the irretrievable breakdown vividly clear again and that breach of duty or at least behaviour that reinforces or perpetuates the discord can be expected from the person who is to be terminated (cf. LG Karlsruhe, judgment of 29.04.98 - O 120/96 KfH I).

Therefore there are still some liability risks with the GmbH. The GRP Rainer lawyers and tax advisers will provide you with comprehensive, individual advice about this.

The GmbH nevertheless offers many advantages, which should, however, also be made use of. To do this, you should always consult a lawyer of your confidence before setting up the company. The experienced lawyers of GRP Rainer will be happy to offer you advice and assistance. In our offices we have lawyers specialising in company law who can help you design your GmbH agreement in the best way possible.

In addition, if problems arise within an existing company, you need a lawyer who will help you acquire the necessary overview. In order that you and your GmbH remain unaffected, if possible, it is important to act promptly in these cases. The lawyers of our company will place their in-depth knowledge at your disposal.

We will help you with setting up a GmbH, preparing the articles of association, change of partners as well as - if necessary - the dissolution of the company.


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