Definition and General Significance of Interim
The term Interim (Latin: “in the meantime”, “provisionally”, “temporarily”) refers in the legal context to a measure, arrangement, or responsibility that is temporary or provisional. In legal practice and statutes, ‘interim’ is used to describe persons, states, or bodies acting for a limited period until a final arrangement or decision is made. Interim can concern various areas of law, such as company law, administrative law, insolvency law, contract law, or procedural law.
Interim in Company Law
Interim Managing Directors and Interim Bodies
In company law, interim solutions are primarily employed to ensure the ability of companies or bodies to act. For example, an interim managing director can be appointed when a mandate ends or is suspended and no successor has yet been named. The appointment is generally made by the appropriate body, such as the supervisory board in a GmbH or joint-stock company, and ends with the proper appointment of a new managing director.
Interim bodies, such as a provisional supervisory board, can be appointed by the register court when a necessary corporate body is vacant and the company must remain capable of acting (§§ 29, 104 AktG, § 45 GmbHG analogously). The legal basis for these measures is found in the respective regulations of commercial companies.
Rights and Duties in the Interim
The rights and duties of interim bodies are in principle the same as those of regular bodies, although their scope of action is often restricted by express resolutions or judicial orders. Administrative and representative powers, within the framework of the interim mandate, are limited to safeguarding the company’s interests and ensuring business continuity.
Interim in Administrative Law
Provisional Administrative Regulations
In administrative law, interim measures are applied, for example, when an authority is dissolved or restructured and a permanent successor arrangement is still pending. Interim authorities or acting heads are responsible for maintaining administrative activities during this period. The legal authorization typically results from specific statutory provisions or from the general principle of proportionality, which is intended to ensure the continuous fulfillment of administrative tasks.
Time Limit and Oversight
Interim measures are, as a rule, time-limited. The transitional solution remains in place until either a new legal basis has been created or a planned succession arrangement is established. Courts have the authority, as part of judicial review, to examine interim measures for their appropriateness and conformity with the law.
Interim in Insolvency Law
Provisional Insolvency Administration
Interim also plays a significant role in insolvency law. If an application for the opening of insolvency proceedings is filed, the court may appoint a provisional insolvency administrator (interim administrator) (§ 21 InsO). This administrator assumes the duties of the future insolvency administrator, but is often restricted in their powers to urgent and protective measures.
Objective and Legal Framework
The aim of interim involvement is to protect the debtor’s assets from detrimental changes until the opening or rejection of the proceedings. The legal basis is the Insolvency Code, which gives the court broad decision-making and discretionary powers in protective measures. The interim administrator is accountable to the court and subject to judicial supervision.
Interim in Procedural Law
Provisional Judicial Orders
Interim measures in procedural law serve to ensure an orderly course of proceedings. Courts, especially in the context of interim legal protection (e.g., interim orders and injunctions pursuant to §§ 935 ff. ZPO), may issue temporary measures. These remain in force until a final decision is made in the main proceedings.
Effect and Binding Effect
Interim decisions are generally not final and have binding effect only until the main proceedings are decided or until they are expressly revoked by the court. They frequently serve as protective measures to prevent adverse changes in the factual or legal situation.
Interim in Contract Law
Interim Arrangements and Agreements
Interim arrangements may also occur in contract law. They are concluded to establish clear legal conditions during a negotiation or settlement phase. Interim contracts typically regulate the rights and obligations of the parties for a defined period, for example, to bridge unresolved issues during contract termination or restructuring.
Legal Consequences of Interim Agreements
Interim arrangements are legally binding, provided they demonstrate mutual intent to create legal relations and comply with statutory form requirements. Violation of mandatory provisions, such as the law on standard business terms (AGB law) or consumer protection law, results in invalidity or modification of the agreement.
Distinction: Interim and Acting Representation
The term ‘interim’ is often used synonymously with “acting” (kommissarisch), but must be distinguished from it. While ‘interim’ generally refers to a temporary state or arrangement, an acting appointment (Kommissariat) typically means a representation expressly provided for by law or statutes for an absent officeholder.
Significance of Interim in International Law
There are also numerous cases of interim arrangements in international and supranational law, such as interim governments in constitutional law, provisional measures by international courts, or interim statutes in international law. The content and scope of such measures are governed by international agreements and are intended to bridge legal uncertainties or state incapacity.
Summary
In the legal context, the term interim describes a temporary measure established regularly by law or judicial order, serving to secure legal positions, maintain the ability to act, or prevent loss of rights. Interim solutions extend across numerous legal fields, including company, administrative, insolvency, and procedural law. They are always intended for a limited time, subject to specific legal requirements, and end with a final regulation or decision.
Frequently Asked Questions
What legal framework applies to an interim manager?
An interim manager is usually engaged as an external service provider and not integrated into a company’s standard employment relationship. The legal basis is often a service or work contract pursuant to §§ 611, 631 BGB. Unlike an employment contract, the interim manager assumes entrepreneurial risk and is not bound by instructions within the meaning of § 106 GewO. For social security, it is essential that there is no disguised employment, as otherwise both parties may face legal and financial repercussions (e.g., back payment of social security contributions). Contractually, duties, rights, obligations, fees, as well as term and termination modalities should be set out in detail. Compliance with requirements for compliance, data protection (GDPR), non-compete clauses, and any confidentiality agreements must also be ensured. Specific requirements may vary by industry and country of assignment.
How is disguised self-employment avoided when using interim managers?
The risk of disguised self-employment exists if an interim manager is factually integrated into the organization like an employee, works under supervision, does not make entrepreneurial decisions, and does not use their own business resources. To avoid this, characteristics of genuine self-employment must be present: The interim manager should serve several clients at once, use their own work equipment, execute assignments independently, and not have fixed working hours or vacation entitlements in the contract. The German Pension Insurance can assess the contractual relationship through a status determination procedure (§ 7a SGB IV). Clear contractual arrangements, project-based cooperation, and demonstrable entrepreneurial characteristics are essential to prevent later back payments and fines.
What liability regulations apply to interim managers?
In contrast to employees, interim managers are generally liable without limitation for damages they culpably cause to the client (§ 280 BGB). However, contracts often limit liability, for example through exclusions or restrictions to intent and gross negligence. Business liability or financial loss liability insurance may also be taken out to cover risks. It is essential that the contract expressly regulates the extent of liability and whether it is, if necessary, limited to a certain amount. For tasks that are subject to a stricter statutory liability regime (e.g., director’s liability as managing director under § 43 GmbHG), additional precautions should be taken.
Is the interim manager subject to dismissal protection?
As interim managers are usually not employees, the provisions of the Dismissal Protection Act (KSchG) do not apply. Termination terms therefore derive solely from the agreed service or work contract. It is advisable to include clear provisions regarding term, extraordinary and ordinary rights of termination, and any notice periods. For fixed-term contracts, ordinary termination rights are generally excluded unless agreed otherwise. Interim managers are not entitled to special protection against dismissal like pregnant women or works council members.
How are data protection and confidentiality ensured in the interim mandate?
Interim managers regularly gain access to sensitive internal information. Legally, a data protection agreement pursuant to GDPR (especially Art. 28 data processing by contract and Art. 29 instructions to recipients) is mandatory when personal data are processed. Strict confidentiality and non-disclosure agreements (NDAs) should also be executed to ensure the protection of trade and business secrets under the German Trade Secrets Act (GeschGehG). It should also be stipulated how documents and data obtained during the mandate will be handled after its end (return, deletion, etc.).
What co-determination rights under labor law must be observed when using interim managers?
The involvement of an interim manager may be subject to co-determination obligations, especially if the latter serves in a managerial capacity or is deemed a disguised employee. According to § 99 Works Constitution Act (BetrVG), the works council is only required to be involved in the hiring of employees; truly independent interim managers are not subject to this co-determination. However, if an interim manager enacts organizational changes or has significant influence on working conditions, consultation of the works council pursuant to § 90 BetrVG or, in the case of personnel measures, pursuant to § 102 BetrVG, may be necessary.
What tax-specific considerations apply when using interim managers?
Interim managers normally operate as self-employed and issue invoices including VAT (§ 19, § 15 UStG). They are personally responsible for the proper payment of income and VAT. However, if disguised employment occurs, company audits may result in reclassification as an employment relationship and back payment of wage tax. Thus, at contract drafting, correct tax handling must be ensured, especially regarding VAT liability and distinction from dependent employment. For international assignments, external tax law and, where applicable, double taxation agreements must also be considered.
