Liabilities of the Managing Director in a German GmbH (PDF)

Research Paper (undergraduate) from the year 2016 in the subject Law - Civil / Private, Trade, Anti Trust Law, Business Law, grade: 1,7, University of Applied Sciences Essen, course: Master of Business Administration (MBA), language: English, abstract: In this assignment we will review such a controversial role like the one on top of the hierarchical structure of any corporation, the Managing Director. For management students it is often the final career goal when they start their business university degrees. Many business schools help by mystifying the MD position and by promising endless rewards, both economically and socially, for those fortunate enough to do what it takes to get to the top. However only those currently in a MD's role see and feel the risks associated with such a responsibility. Exactly the part of the tale nobody tells dreaming business students and talented young managers about.

Our goal with this assignment will be to help develop further understanding about the MD's role by focusing on one of the most unknown sides of this corporate position: the liability (or better expressed, the many liabilities) to which the MD is exposed. Often associated with money, power and status, MDs sit in a very critical position in which mistakes, either actively or passively, can directly lead to serious personal liability in front of the justice which, in some cases, has brought personal discredit to famous CEOs in Germany as well as in many other countries around the world.

The framework for our research will be a specific type of company, the so called GmbH which play a central role within the German tax and legal systems and which are similar to the Ltd. companies in the Anglo-Saxon world. We will introduce the GmbH a bit more into detail in the next section of this assignment.

Our methodology will be based on the use of legal specialist literature to be able to understand different juristic concepts and value their influence on the MD's role. For that we will use direct or indirect citations and personal reflections which will add value to our observations. In the conclusions section we will look backwards and will try to objectively assess if, as many see, the job of a MD is always a safe and quite path complemented by expensive company cars, fat paychecks, bonus or power to decide or if MDs receive all the before mentioned perks as compensation for a high-risk high intellectually demanding position.