Fulfilling the Statutory Duties of GmbH/UG Managing Directors

Anyone who runs a GmbH or UG (haftungsbeschränkt, limited liability) takes on, along with the management role, duties as a company body that are anchored in law. Anyone who neglects them is personally liable for it, regardless of the company's limitation of liability.

In brief: under §§ 40, 42a, 49 GmbHG (supplemented for the UG by § 5a GmbHG), managing directors of a GmbH and UG must keep the shareholder list up to date, have the annual financial statements adopted on time, build a statutory reserve in the case of the UG, and convene the shareholders' meeting without delay when half of the share capital has been lost. Anyone who breaches these duties is personally liable and risks criminal consequences.

Who is affected?

All appointed managing directors (Geschäftsführer) of a GmbH or UG (haftungsbeschränkt) are affected, regardless of whether they are also shareholders, were appointed from outside as non-shareholder managing directors, or run the business only as a side occupation. The duties under §§ 40, 42a, 49 GmbHG apply to the management personally, not only to the company as a legal entity. This applies to single-person GmbHs just as much as to companies with several shareholders, regardless of industry or company size. For the UG (haftungsbeschränkt), the special rules of § 5a GmbHG apply in addition, for example on the mandatory formation of a statutory reserve from the annual profit. What matters for responsibility is solely the formal appointment to the management, not the contractual arrangements in the internal relationship. Which of these duties apply to your company in each individual case is shown by a tool such as Company Audit.

What exactly do you have to do?

Specifically, five central duties as a company body must be fulfilled on an ongoing basis. They concern the currency of register information, proper accounting, the financial safeguarding of the company and the documentation of resolutions:

1. Update the shareholder list with every change in shareholdings and file it with the commercial register (Handelsregister).
2. Prepare the annual financial statements on time and have them adopted by the shareholders.
3. In the case of the UG, allocate 25% of the annual profit to the statutory reserve.
4. If half of the share capital is lost, convene the shareholders' meeting without delay.
5. Record and archive shareholder resolutions and meetings in minutes.

Each of these duties is tied to a specific event, such as a transfer of shares, the end of the financial year, a recognisable loss or a shareholders' meeting, and must be fulfilled promptly accordingly, not only when asked from outside. In practice, it is advisable to view the five points not in isolation but as an ongoing process: anyone who documents changes in shareholdings, annual financial statements, reserve formation and resolutions from the start is less often in the position of having to justify a deadline after the fact.

By when / how often?

There is no single deadline that is the same for all duties; the duties as a company body are to be fulfilled in response to events and occasions, not by the calendar. The shareholder list must be updated and filed with the commercial register with every change in the shareholding structure. The annual financial statements must be prepared on time and adopted by the shareholders. The UG must check again with every annual financial statement whether 25% of the annual profit must be allocated to the statutory reserve. And as soon as a loss amounting to half of the share capital becomes apparent, the management must convene the shareholders' meeting without delay, that is, without culpable hesitation.

What are the consequences of a violation?

Anyone who breaches these duties is personally liable under §§ 40, 42a, 49 GmbHG (or § 5a GmbHG in the case of the UG); the limitation of liability of the GmbH or UG expressly does not protect the management in these cases. Depending on the nature of the breach, it may also be a criminal offence. Ignoring the duty to report a loss is particularly risky: it is a statutory early warning signal for the company's economic crisis, and taking it seriously protects the management from liability if the crisis actually occurs. Precisely because liability attaches to the person and not to the company, it can hardly be averted after the fact; preventive diligence in all five duties is therefore the most effective protection.

Frequently asked questions

Does a classic GmbH also have to build a statutory reserve?

No. The obligation to allocate 25% of the annual profit to a statutory reserve applies specifically to the UG (haftungsbeschränkt) under § 5a GmbHG; this special rule does not apply to the GmbH.

What happens if the shareholder list is not up to date?

An incorrect or outdated shareholder list can jeopardise the legitimacy of shareholders and their resolutions; it must therefore be updated under § 40 GmbHG with every change in shareholdings.

When exactly do I have to convene the shareholders' meeting?

As soon as it is foreseeable that the company has suffered a loss amounting to half of its share capital, the management must convene a shareholders' meeting without delay.

Why is the duty to report a loss considered so important?

It is a statutory early warning signal for the company's economic crisis; taking it seriously protects the management from personal liability if the crisis deepens.

What personal consequences does a breach of duty have for me as a managing director?

Violations of §§ 40, 42a, 49 GmbHG (or § 5a GmbHG in the case of the UG) lead to personal liability of the managing director and, depending on the case, may be a criminal offence.

Source: §§ 40, 42a, 49 GmbHG · § 5a GmbHG. This article is general information and does not replace legal advice in individual cases. As of: July 2026.