Corporate Governance and Special Solutions

We advise companies, shareholders, and board members on issues of proper corporate governance and in special business situations — where responsibilities become unclear and decisions have personal consequences.

What managing directors and boards are accountable for

Board members owe the diligence of a prudent businessman. This does not mean that every wrong decision is liable: Those who decide based on reasonable information and in the interest of the company remain protected, even if the decision turns out to be wrong. The key factor is the basis — and whether it has been documented.

Practically, this means: Before significant decisions, the alternatives, the information obtained, and the underlying considerations should be recorded in minutes. If a decision is later challenged, the burden of proof shifts — the board member must demonstrate that they acted diligently, not the company the opposite.

Responsibilities and consent reservations

Who is allowed to decide what? This question sounds trivial and is the most common cause of disputes between shareholders and management. A catalog of transactions requiring consent creates clarity — provided it is based on thresholds and types of business that are recognizable in everyday life. Phrases like “transactions of significant importance” only shift the dispute.

With multiple managing directors, the distribution of responsibilities comes into play. It does not relieve completely: For core duties — taxes, social contributions, insolvency applications — each member remains jointly responsible and must ensure that the responsible member fulfills them.

Advisory boards and supervisory bodies

Many medium-sized and family-run businesses establish advisory boards. Whether such a body only advises or actually co-decides must be clarified in the articles of association — this affects liability, confidentiality obligations, and the insurability of the members. An advisory board with consent rights is legally different from a circle of experienced advisors.

We design the articles of association, rules of procedure, and remuneration in such a way that the intended role is also legally represented, and accompany appointments, meetings, and minute-taking.

Shareholders' meeting and resolutions

Errors in convening, agenda, or voting make resolutions contestable — and the deadline for a challenge is short. Therefore, anyone leading a meeting should check the invitation, powers of attorney, quorum, and voting prohibitions in advance. A shareholder may not vote on the discharge of their own person or on a legal transaction with themselves; if their vote is counted nonetheless, the resolution is invalid.

We prepare meetings, take minutes, and accompany contentious resolutions. In the event of foreseeable conflict, involving a notary is advisable — their minutes carry significant weight in later proceedings.

Special situations

The interim management. If a managing director is unable to perform their duties, the company becomes incapable of acting as soon as representation is no longer secured — with consequences for banking transactions and ongoing contracts. We organize the appointment at short notice and register it with the commercial register.

The liquidation. An orderly winding-up follows fixed steps: resolution to dissolve, appointment of liquidators, call for creditors, blocking year, final accounting, deletion. Those who miss the call for creditors postpone the end by another year.

The restructuring. Before insolvency occurs, instruments are available that allow for a restructuring outside of proceedings. However, they require that the crisis is recognized early — the later it is, the narrower the options.

Corporate structures across borders

Instructions from the parent company to a German subsidiary find their limits in the law of the subsidiary. The management of a GmbH may follow instructions from the shareholders' meeting — but not those that violate mandatory law or jeopardize the share capital. Anyone executing an instruction that violates a capital maintenance provision is personally liable.

We establish reporting and instruction paths in such a way that group management and local corporate duties do not contradict each other, and document the limits so that they are verifiable in case of emergency.

Insurance and indemnification

A liability insurance for board members mitigates liability risks but has limits: Intentional breaches of duty are excluded, claims of the company against its own board are not covered in every policy, and insurance protection often ends with departure unless post-liability is agreed upon.

In addition, there is the discharge by the shareholders' meeting. It acts as a waiver of known claims — but not of unknown ones. Therefore, anyone leaving as a managing director should arrange for documentation, post-liability, and insurance coverage in addition to the discharge. We design and negotiate such departure agreements.

Related to this consultation

Governance issues touch on corporate law structure, in case of liability the dispute resolution, and in case of breaches of duty, economic criminal law. We therefore consider them from the perspective of the crisis: A regulation is only as valuable as it is on the day it is needed.