To whom does a CEO answer
These tasks and duties await you as a managing director
What is a manager?
The managing director is a natural person who is entrusted with the management of all business in a company. That is why it is also referred to as the top management position of a company.
It can be one or more partners who founded the company. But even a classic employee can take over the post of management.
In practice, a distinction is made between two forms:
- the formal managing director, which is registered in the commercial register
- the actual managing directorwho not only performs internal tasks, but also represents the company externally, operationally and administratively
How do you become a managing director?
A managing director is always appointed during the shareholders' meeting. This means that ultimately the shareholders decide who will take over the management of their company.
It is up to you whether you choose people from your own ranks or appoint an external managing director. Both options are widespread in practice and have both advantages and disadvantages.
It is important to know that the shareholders not only appoint a managing director, but can also give him instructions and dismiss him.
The framework conditions and specifications are set out in the so-called management contract. All rights and obligations are also listed here. In addition, powers that apply to the managing director can be restricted in the contract.
Duties of a managing director
The GmbH managing director: rights and obligations, employment, remuneration and supply, liability, criminal liability and insurance protection
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The central task of the management (which can also be represented by several people) is to fulfill the company's purpose and to take all organizational, commercial and personnel measures that are necessary for this.
As a managing director, you benefit from the management authority. This means that you can decide for yourself how the company's purpose is achieved - as long as you move within the legal and social framework that has been set for you. In addition, the shareholders' meeting can grant itself the right to have to give its consent in certain cases.
What exactly it means in detail to fulfill the company's purpose, of course, differs from company to company and depends on various factors (above all the purpose).
Nevertheless, many tasks can be named that almost always have to be performed by:
- Representation of the company in and out of court
- Definition of corporate goals and corresponding measures for implementation
- Definition of company policy (and execution)
- strategic corporate planning
- Delegating tasks to employees
- Promotion of young talent
- Increase in employee loyalty
- Supervision of finances
- Driving the qualitative and quantitative growth of the company
- Prioritization of tasks
If there are several managing directors in your company, it is quite common to divide the tasks among them. In technical jargon, one speaks of division of departments.
What are the duties of managing directors?
Of course, as a (prospective) managing director you not only have to know your tasks, but also your duties.
First of all: there are a lot of these.
- Due diligence (§43 GmbHG)
- (Basic) capital maintenance (Section 30 (1) GmbHG)
- Obligation to file for insolvency (§15a InsO)
- Risk minimization
- Protects the interests of society
- Constantly monitor liquidity and debt
- Confidentiality (trade secrets)
- Management of business operations
- Accounting obligation (accounting, tax return, etc.)
- Obligations towards employees (e.g. compliance with occupational health and safety, General Equal Treatment Act, etc.)
- Obligation to convene the shareholders' meeting (at least 1x per year)
- Notification obligation to the commercial register
- Duty to provide information and information to the shareholders
- Obligation to provide information and report to health insurance, pension insurance, employment agency, etc.
The duties that you as a managing director know and have to fulfill result from various laws (e.g. GmbH Act, Insolvency Regulations and General Equal Treatment Act) and from the managing director contract.
They always apply to all managing directors that a company has.
This is what managing directors deserve
The position of managing director is so attractive to many people because it is generally considered to be well paid.
No question about it: Anyone who takes on as much responsibility as a managing director should also be rewarded accordingly. But how much do the bosses in Germany actually earn?
First things first, the obvious: If you are about to found a company and want to act as managing director yourself, you must of course not expect the big rain of money right away.
It is normal for founders to pay little or no salary in the initial phase and initially invest every penny in the company.
As soon as the company becomes more successful, managing directors can often look forward to a six-figure annual salary.
The general rule here is: the smaller the company, the less the managing director earns. The industry you are in with your company will also have a major impact on your income.
You will find a lot of concrete figures that answer the question “How much does a managing director earn?” As well as possible in this article.
frequently asked Questions
Do you have any further questions about the managing director?
Then take a look at our FAQ on the subject. You will definitely find an answer there.
Who can become the managing director of a GmbH?
In principle, almost everyone in Germany can become the managing director of a GmbH or another legal form - provided you are
- have not been convicted of any specific offenses in the past five years
- are not subject to a prohibition of exercising a specific trade
Where are managing directors registered?
As the managing director of a company, you have to have your name entered in the commercial register.
In addition, this will also appear in the partnership agreement and in the management agreement.
When is the managing director liable with his private assets?
In principle, corporations such as GmbH, UG and AG are only liable with their entrepreneurial assets.
However, if the managing director disregards his duty of care - that is, if he does not act with the care of a prudent businessman - he may also be held liable for any resulting damage with his private assets. The technical term for this is managing director liability.
To keep this from happening to you, you should always
- observe all laws
- follow the instructions of the shareholders' meeting
- are in constant contact with the shareholders and take their interests into account
- observe the obligations in the management contract
- Check the creditworthiness of contractual partners in advance
- Being able to substantiate decisions with meaningful facts and figures
- Demand collateral (e.g. guarantees) for high-risk transactions
- Think and act with foresight
Also, note: It is completely human to make a mistake every now and then. Not every misstep will automatically result in private liability for the damage.
When is the managing director an employee?
If the managing director is not a partner (also called an external managing director), then it is a managerial employee - that is, an employee.
As a result, he enjoys all the rights and benefits of an employee, such as an income-independent income, occupational safety measures and social insurance.
The fact that the opinion of the external manager as an employee has not yet reached the minds of all shareholders is very nicely taken up in this article.
What did managing directors study?
In order to become the managing director of a company, you do not have to have studied anything or completed any specific training.
Managing directors come from a wide variety of industries and are less characterized by their professional background, but all the more by their personal skills. These include, for example:
- entrepreneurial thinking
- Ability to lead and delegate
- pronounced organizational talent
- Stress resistance
However, if you want to prepare yourself as best as possible for your later life as a managing director, you can also study business administration or corporate management. You can find a very nice overview for the second option here.
Who can fire directors?
The managing director can only be dismissed or dismissed by the shareholders' meeting.
The period of notice that applies to him is stipulated in the management contract.
How many managing directors can a company have?
Every company - be it a GmbH, UG, AG, OHG or KG - needs at least one managing director. Otherwise it is incapable of acting in practice.
In purely theoretical terms, there are no upper limits. However, you can imagine how chaotic management becomes if, for example, ten different people want to assert their respective interests.
The managing director, as the executive officer of the management, is an indispensable actor when it comes to founding a company.
He takes on a lot of tasks and duties and is constantly subject to a high level of responsibility. Before you decide on this post, you should therefore first honestly ask yourself whether you are up to this challenge.
If your answer is “Yes!”, You can look forward to a lot of control and freedom of choice.
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