The Federal Court of Justice Rules on Managing Director Liability in a GmbH & Co. KG
In a recent landmark decision (BGH, judgment of March 14, 2023 – II ZR 162/21, NWB AAAAJ-38751) regarding the liability of managing directors in a GmbH & Co. KG. According to the established case law of the BGH, managing directors of a general partner GmbH are generally liable under § 43(2) GmbHG to the limited partnership as well if they have acted in breach of their duty of care. The court has now ruled that this liability also applies if a limited partner GmbH has assumed management.
Liability Independent of Internal Division of Responsibilities
An important point is that liability exists regardless of the internal division of responsibilities among the managing directors. Although a division of responsibilities within the management of a GmbH is permissible, all managing directors must fulfill their supervisory duties. According to the Federal Court of Justice (BGH), there is no objective reason to limit the protective effect in favor of the limited partnership or to treat the supervisory duties differently from other managing director duties. The limited partnership is just as deserving of protection as it is with regard to the duty to manage the business as a whole, the BGH stated.
Managing Limited Partners in a GmbH Face Greater Liability Than Before
The BGH’s decision means that managing directors of a managing GmbH that provides its services to a large number of GmbH & Co. KGs now face greater liability than before. It is of great importance for the management of such a GmbH to ensure that sufficient capacity is available to perform its duties. Managing directors should not focus exclusively on their own department, but should also keep an eye on business areas outside their department and intervene in significant matters there if discrepancies or particular risks arise.
Comprehensive responsibility and proactive action are required
Overall, the BGH ruling demonstrates that managing director liability in a GmbH & Co. KG entails comprehensive responsibility for all business areas, meaning managing directors are not limited solely to their own areas of responsibility. To reduce liability risks, managing directors should therefore adopt a comprehensive and proactive approach to their duties. Liability extends to the limited partnership if the management of the general partner GmbH consists of managing the affairs of a limited partnership. It is therefore advisable to always be clear about one’s own role within the company and to perform duties conscientiously and carefully in order to minimize potential liability risks.
