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A managing director’s liability after leaving the executive board?

If a GmbH [private limited company] ceases to comply with certain obligations, such as, e.g., transferring the payroll tax, then the local tax office (Finanzamt, FA) can also hold the managing director liable for this. If there are several managing directors, then the FA can decide which of them it will hold liable and to what extent. In the case in question, the Düsseldorf tax court had to determine whether or not the competent FA had exercised its discretion properly here.


In the case on which the Düsseldorf tax court ruled, of 18.11.2022 (case reference: 3 K 590/21 H), the claimant was the sole managing director of B-GmbH in which E also held a stake. The claimant’s managing director’s contract had been for a fixed term until 30.6.2019. On 15.4.2019 the claimant as well as E and A (the managing director of C-GmbH) wrote a letter of intent. According to that, C-GmbH intended to acquire a majority stake in B-GmbH. In the course of this, A and E were supposed to become managing directors and the claimant a consultant, as of 1.7.2019. At the same time, a shareholders’ resolution was drawn up according to which A and E were appointed managing directiors as of 1.5.2019 and 1.7.2019 respectively. E left the GmbH under a notarial agreement of 15.4.2019 and C-GmbH became the majority shareholder of B-GmbH. The entry in the Commercial Register, even after the 30.6.2019, stated that the claimant alone was the managing director. On 23.3.2020, insolvency proceedings pertaining to the assets of B-GmbH were opened. In an assessment notice of 2.6.2020, the FA held the claimant liable for the payment of payroll tax arrears since, according to the excerpt from the Commercial Register, he had been appointed as the managing director for the liability period of June to December 2019.


The legal action, before the tax court, of the claimant who had been held liable was successful because a managing director’s function ceases upon their dismissal. This will apply irrespective of when the termination of the function is entered into the Commercial Register. Therefore, the claimant’s managing director function ceased after the 30.6.2019. While there was no separate shareholders’ resolution for this, nevertheless, the resolution of 15.4.2019 could be interpreted in that way. This resolution was effective and did not need to be certified by a notary. The fact that the claimant had still signed documents after 30.6.2019 was unimportant. From this perspective, he was merely operating as a representative without the power of representation. As of 1.5.2019, A was exercising the function of managing director.

Outcome: In the opinion of the Düsseldorf tax court, the FA’s discretionary decision was wrong because there were still other managing directors who could have been held liable..

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