BGH Judgement: Self-appointment of managing directors in the group and the prohibition of self-dealing
In group structures, it is not uncommon for members of the management board of a stock corporation to become involved in the management of subsidiaries. However, when stock corporation board members appoint themselves as managing directors of a wholly-owned GmbH (German Limited Liability Company) subsidiary (the Company), the law may reach its limits.
Whether and under what conditions a “self-appointment” is possible and whether the interposition of an authorized representative changes anything – the Federal Court of Justice (BGH) ruled on this at the beginning of 2023 (BGH, judgment of 17.01.23, ref.: II ZB 6/22).
