• Dismissal Of A Director Without Notice Knowledge Of The Board Decisive
  • July 11, 2013 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Stuttgart Office
  • In the view of the Federal Court of Justice, the level of knowledge of the board deciding on the dismissal is decisive in determining the reasons for a dismissal of a GmbH director without notice.

    GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Bremen, Düsseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg Stuttgart and London www.grprainer.com/en explain: The dismissal of a GmbH director without notice is done in accordance with the German Civil Code. Dismissal for cause must, however, in principle take place within two weeks following knowledge of the facts decisive for the dismissal. The Federal Court of Justice (BGH) recently had to deal with dismissal of a director without notice and the associated requirements in its judgment of April 9, 2013 (Az.: II ZR 273/11). The BGH ruled in the aforementioned case that for the knowledge of the grounds for dismissal, it solely depended on the knowledge of the board which made the decision on the dismissal without notice.

    Furthermore, the judges are said to have remarked in their judgment that the knowledge sufficient to trigger the two-week time limit exists if the board have learned everything that would be necessary for the determination of a possible dismissal. In the instant case, the Claimant plead that its dismissal was invalid because it did not take place within the designated period. The BGH did not follow this opinion and negated any knowledge. The Court justified this mentioning that what a person is expected to know or a grossly negligent lack of knowledge does not influence the commencement of the time limit. The actual knowledge alone is decisive.

    Company law is very complex and often difficult even for long standing directors and shareholders to penetrate. A lawyer active in the field of company law can shed light on the circumstances and examine possible claims. It is absolutely crucial that potentially associated short deadlines are observed. Prompt action is often necessary in order to be able to enforce claims. Informed knowledge is essential to achieving the best possible results. Dismissals should not simply be accepted; instead their validity should be examined.