Management contract

Depending on the type of company, there are various requirements for contractually regulating the rights and obligations of a managing director. While in the case of partnerships, the partners are generally authorised and obliged to manage the company according to the statutory regulations, in the case of corporations, uninvolved third parties can also take over the management (so-called external managing directors).

The essential parameters of management must be regulated within the managing director agreement; in addition, individual requirements of the respective legal form and the company itself can be agreed.

Tasks and responsibilities of the Managing Director

The managing director agreement should clearly define the duties of the managing director. It is important for both the managing director and the shareholders that the managing director knows what tasks are incumbent upon him, what responsibilities he bears and which transactions require the approval of the shareholders.

Remuneration and fringe benefits

The management contract contains agreements on the fixed remuneration and any bonus. In addition, fringe benefits can be stipulated, such as provisions on a company car, pension scheme, reimbursement of travel expenses or D&O insurance.

Contract term and cancellation

In addition to the start of the activity, the contract should define the contract term and notice periods for the managing director and the company. In addition, it can be stipulated that the dismissal of the managing director also results in the termination of the managing director agreement, so that this does not require a separate shareholder resolution, particularly in the case of corporations.

Post-contractual non-competition clause and duty of confidentiality

Managing director contracts regularly contain post-contractual non-competition clauses and confidentiality provisions. Post-contractual non-competition clauses are intended to prevent the managing director from competing with the company after the end of their employment. They regularly contain what is known as a carte blanche compensation as well as contractual penalties in the event of a breach. A duty of confidentiality can also be agreed in the contract to ensure that the managing director does not pass on confidential company information.

Liability of the managing director

The liability of the managing director in the external relationship can at least be partially facilitated in the internal relationship with the company. The liability conditions should therefore be clearly defined within the managing director agreement in order to clearly clarify in which cases and to what extent the managing director is liable.

Managing director contracts should be individually drafted with a view to the interests of the managing director and the company; we are happy to provide support in the drafting of managing director contracts