Realistic Explanation of Managing Director Liability

This module is based on chapter 8, “Realistic Explanation of Managing Director Liability”, from “Entrepreneurial Structural Intelligence”. Many believe: "I have a GmbH, so I am not liable." This is only partly true. The GmbH is liable with its assets. However, the managing director has personal obligations. If these duties are breached, personal liability can arise. 8.1 The Basic Logic The GmbH is a separate legal entity. The managing director acts on behalf of this entity. He must: act with due care, fulfill statutory obligations, monitor solvency, and ensure proper bookkeeping. Failure to do so can result in personal liability. 8.2 Right and Wrong Practices Wrong Example 1 – Delaying Insolvency Filing A restaurant GmbH incurs losses. The managing director notices: unpaid invoices, overdrawn bank accounts, and supplier reminders. He thinks, "This will recover on its own." He fails to file for insolvency. Consequence: Personal liability becomes possible. Right Behavior Regularly assess solvency. If insolvency threatens: tak...