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Initial situation
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The removal of a managing director initially concerns the corporate office held within the GmbH. This must be distinguished from the contractual relationship under the managing director’s service agreement. In practice, the question therefore often arises whether, and under what conditions, the service relationship ends in addition to the removal—particularly where the removal occurs by mutual consent and no express termination of the contract is declared.
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Decision of the Regional Court (Landgericht) Osnabrück (judgment of 17/06/2020, case no. 18 O 428/18)
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Separation of corporate office and service agreement
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In its decision, the Regional Court (Landgericht) Osnabrück elaborated that the removal as managing director does not automatically lead to termination of the service agreement. Both legal relationships are, as a rule, to be treated independently. It follows that an effective termination of the contract requires separate connecting factors, for example by notice of termination, a termination agreement, or another otherwise unequivocal declaration of termination.
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Implied termination in the case of mutual-consent action
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At the same time, the court clarified that a service agreement does not necessarily have to be terminated only expressly. Under certain circumstances, termination may also result from the conduct of the parties involved. What is decisive is whether the overall picture of the circumstances, from an objective recipient’s perspective, permits the conclusion that both sides do not wish to continue the service relationship and that this could be mutually understood as such.
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In the case decided, the mutually agreed removal was central, and the question was whether this—together with the further accompanying circumstances—was at the same time to be regarded as a tacit (implied) termination of the service agreement.
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Significance for corporate-law practice
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Declaratory value of resolutions and accompanying circumstances
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The decision makes clear that the wording of a removal resolution alone is not decisive. Subsequent conduct, communication between the company and the managing director, and the practical handling of the contractual relationship can also be assessed legally. In this respect, the actual course of events following the removal has considerable indicative value—especially where services are no longer called upon or remuneration is no longer paid and both sides treat this as the conclusion of the contractual relationship.
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Distinction from notice of termination and from a termination agreement
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The judgment also clarifies the distinction from an express notice of termination or a written termination arrangement: while notices of termination and termination agreements typically clearly state whether, and at what point in time, the service relationship ends, implied termination can only be assumed if the circumstances allow an unambiguous conclusion that there is a matching intention to terminate.
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Classification and note on the source situation
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The above statements reproduce the core findings of the published decision of the Regional Court (Landgericht) Osnabrück of 17/06/2020 (case no. 18 O 428/18) in summarized form. No further assessment of the facts is made. Source of the decision note on which this is based: https://urteile.news/LG-Osnabrueck_18-O-42818_Bei-einvernehmlicher-Abberufung-eines-Geschaeftsfuehrers-kann-Anstellungsvertrag-konkludent-beendet-sein~N28842.
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Outlook
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The decision shows that, when removing a managing director, the legal assessment need not be limited to the corporate office, but that the contractual level is to be considered independently and at the same time in the overall context. If, in connection with removal, remuneration, and further cooperation, questions arise regarding the legal classification, a more in-depth examination on a case-by-case basis may be required. Further information about our activities can be found at MTR Legal under Legal advice in corporate law.
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