External relations : chapter 9

• Published date: 01 January 2008
• Author: Christoph Jaehne
• Date: 01 January 2008
• Pages: 151-158
• DOI: 10.10520/EJC74086

151

CHAPTER 9

EXTERNAL RELATIONS

9.1 Introduction

Being juristic persons both entities need to act through organs. Re-

garding external relations the structures of the GmbH as a ‘Kapi-

talgesellschaft’ become apparent. They assign spe cif‌ic functions to

each organ of the GmbH. As regulated in the Act, external relations

fall into the competence of the managing director. Therefore, the Act itself

makes a clear distinction between internal and external relations.

In the close corporation every member has the right to manage and

represent the entity. Comparing this situation with the one in the

GmbH it is obvious that specif‌ic provi sions are essen tial for the close

cor poration. Therefore, in comparing the two Acts the focus will be

on regulations governing the close cor poration.

9.2 GmbH

9.2.1 Managing director and representation

As mentioned above, a managing director is responsible for the com-

pany’s affairs and rep resents it in and out of court.1 If there is more

than one director and the arti cles make no provision in this regard

then they manage its af fairs and represent the GmbH jointly.2 It is

possi ble that the articles divide the management of the com pany’s

affairs into different sec tions and also give each managing direc tor

the right to represent the company alone or to gether with another

man aging direc tor, or a ‘Prokurist’.3 How ever, the commer cial register

must show the actual situ ation.4

The management covers all areas of the company. The com pany

acquires rights and duties through legal transactions en tered into

by the director in its name, be it expressly or im plied.5 Given the fact

that through the articles it is possible to determine the scope of the

management af fairs for each director differently, the question arises

if this is also possible with regard to representation of the compa-

ny. Here one has to distinguish between the ex ternal and internal

rela tionship. Regarding the external rela tionship a restriction on the

1 §§35 (1), 36 GmbHG. Chapter 7.2.1.2, ‘Appointment and legal position’.

2 §35 (2) 2nd sentence GmbHG.

3 ‘Prokurist’ (procuration holder) being the holder of a special statutory

author ity, see chapter 9.2.2, ‘Special types of authority’.

4 §10 (1) 2nd sentence, §39 GmbHG.

5 §36 GmbHG. See also chapter 9.2, ‘GmbH’.